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

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

For the quarterly period ended                    March 31, 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 14,234,740
shares outstanding as of May 3, 1999.



<PAGE>




                         CANADA SOUTHERN PETROLEUM LTD.

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

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

                                                     March 31,      December 31,
                                                       1999            1998
                                                    -----------     -----------
                     Assets

Current assets:
  Cash and cash equivalents                         $ 4,991,080     $ 6,208,634
  Marketable securities                                 741,001         751,511
  Accounts and interest receivable                      430,874         266,116
  Other assets                                          284,999         319,697
                                                    -----------     -----------
Total current assets                                  6,447,954       7,545,958
                                                    -----------     -----------

Oil and gas properties and equipment
  (full cost method)                                 10,103,772      10,000,010
                                                    -----------     -----------
Total assets                                        $16,551,726     $17,545,968
                                                    ===========     ===========

      Liabilities and Shareholders' Equity

Current liabilities:
  Accounts payable                                  $   276,692     $   375,554
  Accrued liabilities                                   343,101         294,491
                                                    -----------     -----------
Total current liabilities                               619,793         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 -14,234,740 shares                     14,234,740      14,234,740
  Contributed surplus                                26,254,139      26,254,139
                                                    -----------     -----------
Total capital                                        40,488,879      40,488,879
  Deficit                                           (24,792,991)    (23,849,001)
                                                    -----------     -----------
Total shareholders' equity                           15,695,888      16,639,878
                                                    -----------     -----------
Total liabilities and shareholders' equity          $16,551,726     $17,545,968
                                                    ===========     ===========


<PAGE>


                         CANADA SOUTHERN PETROLEUM LTD.

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

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

                                                        Three months ended
                                                             March 31,
                                                       1999            1998
                                                   ------------    ------------ 
Revenues:
  Oil sales                                        $     30,094    $    226,579
  Gas sales                                              20,574         146,398
  Proceeds under carried interest agreements             27,056          56,088
  Interest and other income                              83,358          73,649
                                                   ------------    ------------ 
                                                        161,082         502,714
                                                   ------------    ------------ 
Costs and expenses:
  General and administrative                            359,597         368,232
  Legal                                                 557,464         504,088
  Lease operating costs                                  30,763         312,924
  Depletion, depreciation, and amortization             105,900         182,900
  Foreign exchange loss (gain)                           36,926          36,652
  Provision for future site restoration costs                 -           7,300
  Rent                                                   14,422          20,287
                                                   ------------    ------------ 
                                                      1,105,072       1,432,383
                                                   ------------    ------------ 
  Loss before income taxes                             (943,990)       (929,669)
  Income taxes                                                -               -
                                                   ------------    ------------ 
Net loss                                               (943,990)       (929,669)

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

Average number of shares outstanding                 14,234,740      14,234,740
                                                     ==========      ==========

Net loss per share (Basic & Diluted)                   $(.07)          $(.07)
                                                       ======          ======



<PAGE>


                         CANADA SOUTHERN PETROLEUM LTD.

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

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

                                                         Three months ended
                                                              March 31,
                                                        1999            1998
                                                     ----------      ----------
Cash flows from operating activities:
    Net loss                                         $ (943,990)     $ (929,669)
    Adjustments to reconcile net loss
    to net cash used in operating activity:
      Depreciation, depletion and amortization          105,900         182,900
      Future site restoration costs                                       7,300
    Change in current assets and liabilities:
      Accounts and interest receivable                 (164,758)        268,377
      Other assets                                       34,698          (8,911)
      Accounts payable                                  (98,863)       (765,942)
      Accrued liabilities                                48,610          28,218
                                                     ----------      ----------
  Net cash used in operations                        (1,018,403)     (1,217,727)
                                                     ----------      ----------

Cash flows from investing activities:
  Additions to oil and gas properties (net)            (209,661)       (541,967)
  Sale (purchase) of marketable securities               10,510       1,251,483
                                                     ----------      ----------
Net cash provided by investing activities              (199,151)        709,516
                                                     ----------      ----------

Decrease in cash and cash equivalents                (1,217,554)       (508,211)
Cash and cash equivalents at the
  beginning of period                                 6,208,634       2,129,156
                                                     ----------      ----------
Cash and cash equivalents at the
  end of period                                      $4,991,080      $1,620,945
                                                     ==========      ==========



<PAGE>



                         CANADA SOUTHERN PETROLEUM LTD.

                         PART I - FINANCIAL INFORMATION

                                 March 31, 1999
                         (Expressed in Canadian Dollars)

Item 1.  Financial Statements - Notes

         The  information  for the three month  periods ended March 31, 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.

Liquidity and Capital Resources

         At March 31, 1999, the Company had  approximately  $5.7 million of cash
and securities available. Of this amount, approximately $2.0 million are held in
U.S.  Government  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 three  months ended March 31,
1999 decreased to $1,018,000  compared to $1,218,000  during the comparable 1998
period.  The  difference  between  the  periods  was  caused  primarily  by  the
following:

                  Decrease in loss from operations            $ (98,000)
                  Changes in accounts receivable and other     (390,000)
                  Net change in current liabilities             688,000
                                                              ----------
                  Difference in net cash used in operations   $ 200,000
                                                              =========



<PAGE>


                         CANADA SOUTHERN PETROLEUM LTD.

                         PART I - FINANCIAL INFORMATION

                                 March 31, 1999
                         (Expressed in Canadian Dollars)

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

         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  $14,361,000,   of  which  the
Company's  share is $4,308,000,  remain to be recovered at January 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.

         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 and
the impact 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 $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.



<PAGE>


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

Results of Operations

         Three month period ended March 31, 1999 vs. March 31, 1998

         The net loss for the quarter  ended March 31, 1999 was  $943,990  ($.07
per share)  compared  to a net loss of  $929,669  ($(.07 per share) for the 1998
period. A summary of revenue and expenses during the periods is as follows:

                                 1999                 1998            Net Change
                                 ----                 ----            ----------
Revenues                      $   161,082         $   502,714         $(341,632)
Costs and expenses             (1,105,072)         (1,432,383)          327,311
                              ------------        ------------        ----------
Net loss                      $  (943,990)        $  (929,669)        $ (14,321)
                              ============        ============        ==========

         Oil sales  decreased 87% due to a 28% decrease in the price of oil sold
and a 85% decrease in the number of units sold. 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 March 31,
                 ---------------------------------------------------------------
                              1999                              1998
                 ------------------------------   ------------------------------
                        Average price                    Average price
                  bbls     per bbl      Total      bbls     per bbl      Total
Oil sales        2,752     $11.21      $31,000    18,194    $15.52     $282,000
Royalties paid                          (1,000)                         (55,000)
                                       --------                        ---------
Total                                  $30,000                         $227,000
                                       =======                         ========

         Gas sales  decreased  86%. There was a 19% decrease in gas prices and a
91%  decrease in the number of units sold.  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:

                              Three month period ended March 31,
                 ---------------------------------------------------------------
                              1999                              1998
                 ------------------------------   ------------------------------
                        Average price                    Average price
                 mmcf      per mcf      Total     mmcf      per mcf      Total
Gas sales        4.5        $1.76      $ 8,000     57        $2.18     $124,000
Royalty income                          15,000                           44,000
Royalties paid                          (2,000)                         (22,000)
                                       --------                        ---------
Total                                  $21,000                         $146,000
                                       =======                         ========


<PAGE>


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

         Proceeds under carried interest agreements  decreased to $27,000 during
1999 from $56,000 in 1998. During 1998, there were significant expenditures made
by the operators of the carried  interest  properties  (other than  Kotaneelee),
therefore, revenues from these properties are expected to be substantially lower
in 1999.

         Interest  and other  income  was 13%  higher in 1999.  Interest  income
increased  13% from $63,000 in 1998 to $72,000 in the current  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 $4,000  compared  to $11,000 in
1998.

         General and administrative  costs decreased 2% in 1999 to $360,000 from
$368,000 in 1998.

         Legal  expenses  increased  11% during 1999 to $557,000  from  $504,000
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 90% from $313,000 in 1998 to $31,000 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 42% in 1999
to $106,000 from $183,000 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 $37,000 was recorded in 1999,  compared to a
loss of  $37,000 in 1998 on the  Company's  U.S.  investments.  The value of the
Canadian  dollar was U.S. $.6535 at December 31, 1998 compared to U.S. $.6628 at
March 31, 1999.

         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 March 31,  1999,  the  carrying  value of such  investments  was
approximately  $5,588,000 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 March 31, 1999,
the investments in the United States totaled $2,014,000.



<PAGE>



                         CANADA SOUTHERN PETROLEUM LTD.

                           PART II - OTHER INFORMATION

                                 March 31, 1999

Item 5.  Other Information

          Production from the Kotaneelee field reported to the Canadian National
Energy Board for the three months ended March 31, 1999 was as follows:

                                 Monthly Production             Daily Production
                                       (bcf)                         (mmcf)

        January 1999                    2.1                            71
        February 1999                   1.5                            50
        March 1999                      1.8                            61

Item 6.  Exhibits and Reports on Form 8-K

          (a)     Exhibits

                  None.

          (b)     Reports on Form 8-K

                  None.



<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:  May 7, 1999                         By  /s/ Kelly B. Johnson
                                               ---------------------------------
                                               Treasurer and Chief Financial and
                                               Accounting Officer