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, 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 14,239,740
shares outstanding as of August 2, 1999.



<PAGE>




                         CANADA SOUTHERN PETROLEUM LTD.

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

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

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

Current assets:
<S>                                                                              <C>                   <C>
  Cash and cash equivalents                                                      $ 4,887,716           $ 6,208,634
  Marketable securities                                                                    -               751,511
  Accounts and interest receivable                                                   292,831               266,116
  Other assets                                                                       248,961               319,697
                                                                                 -----------           -----------
Total current assets                                                               5,429,508             7,545,958
                                                                                 -----------           -----------

Oil and gas properties and equipment
  (full cost method)                                                              10,295,997            10,000,010
                                                                                 -----------           -----------
Total assets                                                                     $15,725,505           $17,545,968
                                                                                 ===========           ===========

                 Liabilities and Shareholders' Equity

Current liabilities:
  Accounts payable                                                               $   422,417           $   375,554
  Accrued liabilities                                                                248,959               294,491
                                                                                 -----------           -----------
Total current liabilities                                                            671,376               670,045
                                                                                 -----------           -----------

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

Shareholders' Equity
  Limited Voting Shares, par value $1 per share
  Authorized - 100,000,000 shares
  Outstanding -14,239,740 and 14,234,740 shares,                                  14,239,740            14,234,740
     respectively
  Contributed surplus                                                             26,284,139            26,254,139
                                                                                 -----------           -----------
Total capital                                                                     40,523,879            40,488,879
  Deficit                                                                        (25,705,795)          (23,849,001)
                                                                                 -----------           -----------
Total shareholders' equity                                                        14,818,084            16,639,878
                                                                                 -----------           -----------
Total liabilities and shareholders' equity                                       $15,725,505           $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                         Six months ended
                                                                     June 30,                                  June 30,

                                                            1999                 1998                 1999                 1998
                                                         -----------          -----------          -----------          -----------
Revenues:
<S>                                                      <C>                  <C>                  <C>                  <C>
  Oil sales                                              $    33,581          $   198,798          $    63,675          $   425,377
  Gas sales                                                    7,784              130,951               28,358              277,349
  Proceeds under carried interest agreements                 100,639               53,909              127,695              109,997
  Interest and other income                                   61,740               58,450              145,098              132,099
                                                         -----------          -----------          -----------          -----------
  Total revenues                                             203,744              442,108              364,826              944,822
                                                         -----------          -----------          -----------          -----------
Costs and expenses:
  General and administrative                                 365,498              395,653              725,095              763,885
  Legal                                                      561,749              552,063            1,119,213            1,056,151
  Lease operating costs                                       37,353              269,910               68,116              582,834
  Depletion, depreciation, and amortization                   82,300              218,900              188,200              401,800
  Foreign exchange loss (gain)                                55,319             (106,429)              92,245              (69,777)
  Provision for future site restoration costs                      -                8,200                    -               15,500
  Rent                                                        14,329               20,771               28,751               41,058
                                                         -----------          -----------          -----------          -----------
  Total costs and expenses                                 1,116,548            1,359,068            2,221,620            2,791,451
                                                         -----------          -----------          -----------          -----------
  Loss before income taxes                                  (912,804)            (916,960)          (1,856,794)          (1,846,629)
  Income taxes                                                     -                    -                    -                    -
                                                         -----------          -----------          -----------          -----------
Net loss                                                    (912,804)            (916,960)          (1,856,794)          (1,846,629)

  Deficit - beginning of period                          (24,792,991)         (22,072,133)         (23,849,001)         (21,142,464)
                                                         ------------         ------------         ------------         ------------
  Deficit - end of period                               $(25,705,795)        $(22,989,093)        $(25,705,795)        $(22,989,093)
                                                        =============        =============        =============        =============

Average number of shares outstanding                      14,235,990           14,234,740           14,236,740           14,234,740
                                                          ==========           ==========           ==========           ==========

Net loss per share (Basic & Diluted)                        $(.06)               $(.06)               $(.13)               $(.13)
                                                            ======               ======               ======               ======
</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>
                                                                                         Six months ended
                                                                                             June 30,

                                                                                    1999                   1998
                                                                                -----------            -----------
Cash flows from operating activities:
<S>                                                                             <C>                    <C>
    Net loss                                                                    $(1,856,794)           $(1,846,629)
    Adjustments to reconcile net loss to net cash used in operating activity:
      Depreciation, depletion and amortization                                      188,200                401,800
      Future site restoration costs                                                       -                 15,500
    Change in current assets and liabilities:
      Accounts and interest receivable                                              (26,715)               483,680
      Other assets                                                                   70,736                  4,967
      Accounts payable                                                               46,862               (258,616)
      Accrued liabilities                                                           (45,532)                  (929)
                                                                                -----------            -----------
  Net cash used in operations                                                    (1,623,243)            (1,200,227)
                                                                                -----------            -----------

Cash flows from investing activities:
  Additions to oil and gas properties (net)                                        (484,186)            (1,428,939)
  Sale (purchase) of marketable securities                                          751,511              3,373,334
                                                                                -----------            -----------
Net cash provided by investing activities                                           267,325              1,944,395
                                                                                -----------            -----------

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

Increase (decrease) in cash and cash equivalents                                 (1,320,918)               744,168
Cash and cash equivalents at the
  beginning of period                                                             6,208,634              2,129,156
                                                                                -----------            -----------
Cash and cash equivalents at the
  end of period                                                                 $ 4,887,716            $ 2,873,324
                                                                                ===========            ===========
</TABLE>



<PAGE>



                         CANADA SOUTHERN PETROLEUM LTD.

                         PART I - FINANCIAL INFORMATION

                                  June 30, 1999
                         (Expressed in Canadian Dollars)

Item 1.  Financial Statements - Notes

         The information for the three and six month periods ended June 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 June 30, 1999,  the Company had  approximately  $4.9 million of cash
and securities available. Of this amount, approximately $1.3 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.

                                  June 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 June 30, 1999
increased  to  $1,623,000  compared to  $1,200,000  during the  comparable  1998
period.  The  difference  between  the  periods  was  caused  primarily  by  the
following:

                  Increase in loss from operations            $(239,000)
                  Changes in accounts receivable and other     (445,000)
                  Net change in current liabilities             261,000
                                                              ----------
                  Increase in net cash used in operations     $(423,000)
                                                              ==========

         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 are the Company's major sources of working capital.

         The  operator of the  Kotaneelee  gas field has reported to the Company
that  development  costs  totaling  approximately  $10,843,000,   of  which  the
Company's  share is  $3,253,000,  remain to be recovered at April 30, 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 February 28, 1999 were $77,983,000.

     Projections by the operator  indicate that the carried interest account may
reach  payout  status  prior  to  the  end of  1999.  However,  there  can be no
assurances that payout will occur within that  timeframe,  inasmuch as there are
uncertainties as to production  levels, gas pricing,  field operating  expenses,
additional capital expenditures and the impact of the Kotaneelee litigation.

         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.



<PAGE>


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

         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  $750,000. 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 June 30, 1999 vs. June 30, 1998

         The net loss for the quarter ended June 30, 1999 was $912,804 ($.06 per
share) compared to a net loss of $916,960 ($(.06 per share) for the 1998 period.
A summary of revenue and expenses during the periods is as follows:

                                 1999                1998             Net Change
                                 ----                ----             ----------
Revenues                     $   203,744         $   442,108          $(238,364)
Costs and expenses            (1,116,548)         (1,359,068)           242,520
                             ------------        ------------         ----------
Net loss                     $  (912,804)        $  (916,960)         $   4,156
                             ============        ============         ==========

         Oil  sales  decreased  83% in the 1999  period.  The  Company  sold the
majority of its oil producing properties effective July 1 and September 1, 1998.
Oil unit sales in barrels ("bbls") (before deducting  royalties) and the average
price per barrel sold during the periods indicated were as follows:

                                  Three month period ended June 30,
                   -------------------------------------------------------------
                               1999                           1998
                   -----------------------------  ------------------------------
                          Average price                  Average price
                    bbls     per bbl     Total     bbls     per bbl      Total
Oil sales          2,354     $15.97     $38,000   19,724     $13.13    $259,000
Royalties paid                           (4,000)                        (60,000)
                                        --------                       ---------
Total                                   $34,000                        $199,000
                                        =======                        ========

         Gas  sales  decreased  94% in the 1999  period.  The  Company  sold the
majority of its working  interest gas  properties  effective  July 1, 1998.  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 (continued)

                                  Three month period ended June 30,
                   -------------------------------------------------------------
                               1999                           1998
                   -----------------------------  ------------------------------
                         Average price                  Average price
                   mmcf     per mcf      Total    mmcf     per mcf       Total
Gas sales            1       $1.26     $  2,000    57       $2.01      $115,000
Royalty income                           12,000                          31,000
Royalties paid                           (6,000)                        (15,000)
                                       ---------                       ---------
Total                                  $  8,000                        $131,000
                                       ========                        ========

         Proceeds under carried interest agreements increased to $101,000 during
1999 from $54,000 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 6% higher  in 1999.  Interest  income
increased  24% from  $48,000 in 1998 to  $60,000  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 $10,000 in
1998.

         General and administrative  costs decreased 8% in 1999 to $365,000 from
$396,000 in 1998.  The primary reason for the decrease is lower mailing costs to
shareholders and lower consulting costs.

         Legal  expenses  increased  2% during  1999 to $562,000  from  $552,000
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.

         Lease operating costs decreased 86% from $270,000 in 1998 to $37,000 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 62% in 1999
to $82,000 from  $219,000 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 loss of $55,000 was recorded in 1999,  compared to a
gain of $106,000 in 1998 on the  Company's  U.S.  investments.  The value of the
Canadian  dollar was U.S.  $.6628 at March 31, 1999  compared to U.S.  $.6789 at
June 30, 1999.

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

         Six month period ended June 30, 1999 vs. June 30, 1998

         The net  loss  for  the six  month  period  ended  June  30,  1999  was
$1,856,794  ($(.13) per share) compared to a net loss of $1,846,629  ($(.13) per
share) for the 1998 period. A summary of revenue and expenses during the periods
is as follows:

                                1999                 1998             Net Change
                                ----                 ----             ----------
Revenues                    $   364,826          $   944,822          $(579,996)
Costs and expenses           (2,221,620)          (2,791,451)           569,831
                            ------------         ------------         ----------
Net loss                    $(1,856,794)         $(1,846,629)         $ (10,165)
                            ============         ============         ==========

         Oil sales  decreased 85% in 1999.  The Company sold the majority of its
oil producing  properties effective July 1 and September 1, 1998. Oil unit sales
in barrels  ("bbls")  (before  deducting  royalties)  and the average  price per
barrel sold during the periods indicated were as follows:

                                  Six month period ended June 30,
                   -------------------------------------------------------------
                               1999                           1998
                   -----------------------------  ------------------------------
                          Average price                   Average price
                    bbls     per bbl     Total     bbls      per bbl      Total
Oil sales          5,093     $13.44     $68,000   39,419     $13.73     $541,000
Royalties paid                           (4,000)                         116,000
                                        --------                        --------
Total                                   $64,000)                        $425,000
                                        ========                        ========

         Gas sales  decreased 90% in 1999.  The Company sold the majority of its
working  interest gas properties  effective July 1, 1998. 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 (continued)

                                  Six month period ended June 30,
                   -------------------------------------------------------------
                               1999                           1998
                   -----------------------------  ------------------------------
                         Average price                  Average price
                   mmcf     per mcf      Total    mmcf     per mcf       Total
Gas sales            5       $2.06      $ 9,000    109      $2.19      $239,000
Royalty income                           27,000                          75,000
Royalties paid                           (8,000)                        (37,000)
                                        --------                       ---------
Total                                   $28,000                        $277,000
                                        =======                        ========

         Proceeds under carried  interest  agreements  increased 16% to $128,000
during 1999 compared to $110,000 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 10%  higher in 1999.  Interest  income
increased  from  $111,000  in 1998 to  $132,000  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 6,000  compared  to $21,000 in
1998.

         General and  administrative  expenses  decreased 5% to $725,000 in 1999
from $764,000 in 1998.

     Legal  expenses  increased  6%  during  1999  to  $1,119,000   compared  to
$1,056,000  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 88% from $583,000 in 1998 to $68,000 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 53% in 1999
to $188,000 from $402,000 in 1998.  The Company sold the majority of its oil and
gas producing properties during the second half of 1998.


<PAGE>



         A foreign exchange loss of $92,000 was recorded in 1999,  compared with
a gain of $70,000 on the Company's  U.S.  investments  in 1998. The value of the
Canadian  dollar was U.S.  $.6789 at June 30, 1999  compared  to U.S.  $.6535 at
December 31, 1998.

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

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,  1999,  the  carrying  value of such  investments  was
approximately  $4,027,000 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 June 30, 1999, the
investments in the United States totaled $1,605,000.



<PAGE>



                         CANADA SOUTHERN PETROLEUM LTD.

                           PART II - OTHER INFORMATION

                                  June 30, 1999

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

                  (a) On June 16,  1999,  the  Company  held its Annual  General
Meeting of Shareholders.

                  (b) Mr.  Timothy L.  Largay was  reelected  a director  of the
Company. The vote was as follows:

                           For                         435,431
                           Withheld                     24,265

                  (c) The  firm  of  Ernst & Young  LLP  was  appointed  as  the
                      Company's   independent  auditors   for  the  year  ending
                      December 31, 1999.  The vote was as follows:

                      For                         438,687
                      Against                       6,897
                      Abstain                      14,112

Item 5.  Other Information

          The most  current  information  available  about  production  from the
Kotaneelee  gas field as reported to the Canadian  National  Energy Board is as
follows:

                                 Monthly Production           Daily Production
                                       (bcf)                       (mmcf)

        April 1999                      2.0                         67.0
        May 1999                        1.9                         62.7



<PAGE>


                         CANADA SOUTHERN PETROLEUM LTD.

                           PART II - OTHER INFORMATION

                                  June 30, 1999

Item 6.  Exhibits and Reports on Form 8-K

          (a)     Exhibits

                  None.

          (b)     Reports on Form 8-K

     On June 29, 1999,  the Company filed a Current Report on Form 8-K to report
that the Kotaneelee  trial was adjourned  until September 1999 and to report the
amount of the  remaining  recoverable  costs at the  Kotaneelee  gas field to be
recovered at March 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:  August 5, 1999                       By /s/ Kelly B. Johnson
                                               Treasurer and Chief Financial and
                                               Accounting Officer