As the bidding war for the common shares of Calgary-based Canada Southern Petroleum Ltd. continues to heat up (see Daily GPI, May 31; June 6), the company said Monday it welcomes Canadian Oil Sands’ announcement that it has reduced its minimum tender condition to 50.01%. Canada Southern added that Canadian Superior failed to meet its own deadline for filing an amended offer.

“By lowering its minimum tender condition, Canadian Oil Sands has once again demonstrated its commitment to getting this deal done,” said Richard McGinity, chairman of the Canada Southern Board. “Our board maintains its unanimous recommendation that shareholders accept Canadian Oils Sands’ US$13.10 all-cash offer and tender their shares into it before it expires on August 18th because there is no guarantee it will be extended beyond that date.”

Following the announced extension of its offer last week to August 18, 2006, Canadian Oil Sands further amended its offer to reduce its minimum tender condition to 50.01% (as opposed to the previous 66 2/3%) of the common shares of Canada Southern.

“We believe that our US$13.10 cash offer has been and remains the best available to the shareholders of Canada Southern,” said Canadian Oil Sands CEO Marcel Coutu. “In our opinion, the superiority of our offer is evidenced by the over six million common shares (or approximate 45% of the common shares) tendered on August 1, 2006, a number of which were common shares held by professionally managed shareholders, including hedge funds.”

McGinity also addressed the lack of an amended offer from Canadian Superior. “Despite Canadian Superior’s apparent attempts to confuse the market, our shareholders should be under no illusions. There are two offers on the table for Canada Southern at this time: Canadian Oil Sands’ offer of US$13.10 per share in cash, and Canadian Superior’s original cash and stock offer valued at approximately US$8.16, based on Friday’s closing market price of Canadian Superior shares on the AMEX.” McGinity said.

Despite stating that the filing of an amended offer “is expected to be completed by Friday, August 4th with all applicable regulatory authorities,” Canadian Superior Energy Inc. has yet to file a formal amended offer with Canadian and U.S. securities regulators,” McGinity said. “We have now seen five press releases from Canadian Superior in the twelve days since they first announced their intention to amend their original offer, but we still don’t have an amended offer. Canadian Superior’s failure to meet its own deadline further diminishes its credibility as a bidder in this process,” he said.

McGinity added that if shareholders have already tendered to the current Canadian Superior offer, the board recommends that shareholders withdraw them immediately. Assistance in withdrawing their shares from the offer is available from the Proxy Advisory Group at 1-866-678-1770.

The big attraction of Calgary-based Canada Southern is its 39,000 net acres in the Canadian Arctic Islands. Canada Southern estimates its potential Arctic gas reserves at about a net 927 Bcfe, which is 68 times greater than its current 13.7 Bcfe of proved and probable reserves (see Daily GPI, May 26). The company also has producing assets in the Yukon Territory, in northeastern British Columbia and in southern Alberta.

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