TMX group

Conference call today, 10 a.m. MST
(see details at end)

CALGARY, June 19 /CNW/ - (TSX - COS.UN) - Canadian Oil Sands Trust
("Canadian Oil Sands" or the "Trust") today announced that its wholly owned
subsidiary, Canadian Oil Sands Limited, has agreed to make an offer to
purchase all of the outstanding common shares of Canada Southern Petroleum
Ltd. ("CSP") for cash consideration of US$9.75 per common share (or
approximately Cdn$165 million in aggregate).
CSP is estimated to have Arctic Island marketable natural gas interests
of approximately 927 billion cubic feet equivalent ("bcfe"), net to CSP, based
on available information and CSP's internal estimates. CSP also holds
conventional natural gas reserves in southern Yukon and northern B.C.
currently producing six million cubic feet per day, which Canadian Oil Sands
intends to sell. The value of these conventional gas reserves, together with
CSP's working capital of about $20 million, represent approximately half of
the company's value, resulting in a net cost for the acquisition of the Arctic
gas resource of about $0.10 per thousand cubic feet.
Under its agreement with CSP, Canadian Oil Sands is entitled to receive a
break fee of approximately four per cent of the value of the transaction in
certain circumstances, including if CSP enters into an agreement with another
party for a takeover of CSP or if the CSP board of directors recommends that
its shareholders deposit their shares in favour of another takeover proposal.
This strategic acquisition provides Canadian Oil Sands with a unique
opportunity to secure a large, long-life natural gas resource to reduce the
risk of significant future natural gas price increase impacts on its Syncrude
oil sands production. On a macro-basis, CSP's best estimate of 927 bcfe of
natural gas represents the Trust's expected natural gas requirements to
produce its share of light, sweet crude oil at post Stage 3 productive
capacity rates for approximately 25 years, thereby providing a long-term hedge
against any significant increases in natural gas prices in the long-term.
"For about the equivalent of one month's funds from operations, we are
acquiring a frontier gas resource that we believe is equivalent to about
25 years of our natural gas consumption at Syncrude," said Canadian Oil Sands
President and CEO, Marcel Coutu. "While creating a hedge against rising
natural gas prices, this acquisition also provides us with the opportunity to
participate in the development of another long-life energy resource in the
future."
Mr. Coutu adds: "CSP's Arctic interests are comprised mostly of carried
interests that can be maintained and developed without having to provide any
significant capital. The carried interests may also be converted at CSP's
option into direct working interests at any time and without penalty upon
payment of the cumulative carry amount."
Canadian Oil Sands presently intends to finance the acquisition entirely
with bank debt and funds from operations. The acquisition will not impact
current distribution levels nor the Trust's plans to continue to follow its
distribution strategy with the expectation that this transaction will have
only a modest impact on the Trust's debt target time horizon. The Trust has
indicated it plans to reduce its net debt to about $1.2 billion before
considering further increases to its distributions.
The agreement with CSP provides that CSP must give Canadian Oil Sands
72 hours prior notice of any superior takeover proposal with another party
that CSP wishes to accept before entering into any binding agreement with that
party. Canadian Oil Sands has the right to match any superior takeover
proposal in which event CSP may not accept the proposal from the other party.
If Canadian Oil Sands does not match the other proposal, CSP must deposit the
break fee with Canadian Oil Sands' counsel before entering into a binding
agreement with the other party.

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CONFERENCE CALL NOTICE

Canadian Oil Sands will host a conference call and webcast for
institutional investors and analysts today to discuss the Canada Southern
Petroleum acquisition.

Members of the media and individual Unitholders are invited to
participate in a listen only mode, and may call Canadian Oil Sands
directly with their questions following termination of the conference
call.

Time:  10:00 a.m. Mountain Time (12:00 noon Eastern Time)
       It is advised to call ten minutes prior to start time.
Date:  June 19, 2006
Dial:  416-644-3422 in the Toronto area or 800-814-4890

A recording of the conference call will be available about two hours
after the event until midnight Mountain Time, June 26, 2006. To listen to
the audio replay in the Toronto area, call 416-640-1917 or toll-free at
877-289-8525 (passcode: 21193631 followed by the number sign).

The simultaneous audio webcast will be available on Canadian Oil Sands'
web site at www.cos-trust.com

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RBC Capital Markets acted as financial advisors to Canadian Oil Sands in
this transaction.

Canadian Oil Sands Trust is an open-ended investment trust that generates
income from its indirect 35.49 per cent working interest in the Syncrude Joint
Venture. The Trust has approximately 466 million units outstanding, which
trade on the Toronto Stock Exchange under the symbol COS.UN. The Trust is
managed by Canadian Oil Sands Limited.

Advisory: In the interest of providing Canadian Oil Sands Trust
("Canadian Oil Sands", "COS" or the "Trust") unitholders and potential
investors with information regarding the Trust, including management's
assessment of the Trust's future plans and operations, certain statements
throughout this press release contain "forward-looking statements". Forward-
looking statements in this release include, but are not limited to, statements
with respect to: the future production of natural gas from the Arctic
licenses; the estimated natural gas requirements to produce the Trust's share
of Syncrude crude oil; the ability to sell the conventional assets; the
expected life of the hedge of natural gas to production; the expected net cost
for the Arctic Island assets; the method of financing the acquisition; the
impact on debt levels on distributions that this acquisition will have; the
plan to reduce debt to $1.2 billion before making further distribution
increases and the ability to complete the acquisition. Resources are not the
same as reserves and may not be recognized under applicable Canadian or US
securities rules and regulations.
You are cautioned not to place undue reliance on forward-looking
statements, as there can be no assurance that the plans, intentions or
expectations upon which they are based will occur. By their nature, forward-
looking statements involve numerous assumptions, known and unknown risks and
uncertainties, both general and specific, that contribute to the possibility
that the predictions, forecasts, projections and other forward-looking
statements will not occur. Although the Trust believes that the expectations
represented by such forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. Some of the risks
and other factors which could cause results to differ materially from those
expressed in the forward-looking statements contained in this press release
include, but are not limited to: the difficulties and risks involved in any
oil and gas operation, especially at the development stage; the ability to
complete any take-over transaction due to the requirement for shareholders to
tender and the requirement for certain regulatory approvals; the ability to
sell natural gas properties at a price and on terms acceptable to the Trust;
the receipt of necessary regulatory approvals; the ability to develop natural
gas in the Arctic region in an economic or timely manner, or at all; general
economic conditions; the price of crude oil and natural gas; government
regulations and the nature of discretionary orders; and such other risks and
uncertainties described from time to time in the reports and filings made with
securities regulatory authorities by the Trust. We would refer you to the
risks and assumptions further outlined in the Trust's annual information form
and annual and quarterly financial reports.

Canadian Oil Sands Limited
Marcel Coutu
President & Chief Executive Officer

Units Listed - Symbol: COS.UN
Toronto Stock Exchange