CanArgo Energy Corporation
OSLO STOCK EXCHANGE : CNR
NYSE Alternext US : CNR

CanArgo Energy Corporation

November 09, 2006 19:32 ET

CanArgo Energy Corporation: Q3 Results 2006

TBILISI, GEORGIA--(CCNMatthews - Nov. 9, 2006) - CanArgo Energy Corporation ("CanArgo" or the "Company") (OSE:CNR) (AMEX:CNR) today reported results for the three and nine months ending September 30, 2006 and issued an operations update on the Manavi M12 appraisal well which is currently drilling in Georgia.

Please see the tables attached to this release.

The Form 10-Q filed with the Securities and Exchange Commission in the United States can be accessed at the following link;

http://www.sec.gov/Archives/edgar/dat

Operations Update

Using directional drilling equipment and services provided by Baker-Hughes, the Manavi M12 well has been sidetracked in an 8 1/2 inch hole to a depth of 15,360 feet (4,682 metres) close to the top of the higher pressure and more porous / permeable reservoir interval in the upper Cretaceous where a major hydrocarbon influx was observed in the original well bore. A 7 inch casing has been run and cemented at this level so as to isolate the zone where the differential sticking occurred with the previous drilling. Once the 7 inch casing has been tied back to surface, we plan to drill ahead in a 6 1/2 inch hole for approximately 230 feet (70 metres) through the more porous reservoir zone and then perform an open hole drill stem test (DST) on this interval. The DST would provide information on reservoir pressure, fluid type and flow rate before drilling ahead to the planned total depth (TD) of approximately 16,732 feet (5,100 metres). We expect to be doing this test towards the end of November and to reach the planned TD in the second half of December. Once the well has reached TD we would plan to run electric logs to confirm the presence of hydrocarbons in the deeper section prior to casing the well, and on demobilising the rig test any additional intervals and conduct long term production testing as necessary.

CanArgo is an independent oil and gas exploration and production company with its oil and gas operations currently located in Georgia and in the Republic of Kazakhstan.

The matters discussed in this press release include forward-looking statements, which are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated in such forward-looking statements. Such risks, uncertainties and other factors include the uncertainties inherent in oil and gas development and production activities, the effect of actions by third parties including government officials, fluctuations in world oil prices and other risks detailed in the Company's reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission. The forward-looking statements are intended to help shareholders and others assess the Company's business prospects and should be considered together with all information available. They are made in reliance upon the safe harbour provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company cannot give assurance that the results will be attained.



CANARGO ENERGY CORPORATION AND SUBSIDIARIES

Selected Financial Information
Consolidated Condensed Statements of Operations
Expressed in United States dollars

Unaudited Unaudited
-------------------------- -------------------------
Three Months Ended Nine Months Ended
-------------------------- -------------------------
September September September September
30, 2006 30, 2005 30, 2006 30, 2005
------------- ------------ ------------ ------------
(Expressed in United States dollars)
Operating Revenues from
Continuing Operations:
Oil and gas sales $ 2,090,147 $ 2,580,847 $ 4,092,224 $ 3,931,039
------------- ------------ ------------ ------------
2,090,147 2,580,847 4,092,224 3,931,039
------------- ------------ ------------ ------------
Operating Expenses:
Field operating
expenses 446,010 756,309 1,340,169 1,328,343
Direct project costs 235,159 303,768 677,656 909,525
Selling, general and
administrative 4,180,527 3,277,869 10,283,885 7,453,297
Depreciation, depletion
and amortization 720,646 769,909 2,251,574 1,800,947
------------- ------------ ------------ ------------
5,582,342 5,107,855 14,553,284 11,492,112
------------- ------------ ------------ ------------
Operating Loss from
Continuing Operations (3,492,195) (2,527,008) (10,461,060) (7,561,073)
------------- ------------ ------------ ------------
Other Income (Expense):
Interest, net (1,954,296) (458,088) (4,194,903) (437,614)
Foreign exchange gains
(losses) (163,653) (51,587) 220,800 (105,012)
Other (89,819) 234,343 (210,551) 142,177
Equity Loss from
investments - - - (155,016)
------------- ------------ ------------ ------------
Total Other Expense (2,207,768) (275,332) (4,184,654) (555,465)
------------- ------------ ------------ ------------
Loss from Continuing
Operations Before
Taxes (5,699,963) (2,802,340) (14,645,714) (8,116,538)
Income taxes - - - -
------------- ------------ ------------ ------------
Loss from Continuing
Operations (5,699,963) (2,802,340) (14,645,714) (8,116,538)
Net Income (Loss) from
Discontinued Operations,
net of taxes (18,154) (139,590) 763,419 444,649
------------- ------------ ------------ ------------
Net Loss and
Comprehensive Loss $(5,718,117) $(2,941,930) $(13,882,295) $(7,671,889)
------------- ------------ ------------ ------------
------------- ------------ ------------ ------------
Weighted average number
of common shares
outstanding
- Basic 224,260,628 221,485,695 223,942,445 207,880,022
------------- ------------ ------------ ------------
- Diluted 224,260,628 221,485,695 223,942,445 207,880,022
------------- ------------ ------------ ------------
Basic and Diluted Net
Loss Per Common Share
- from continuing
operations $ (0.03) $ (0.01) $ (0.07) $ (0.04)
- from discontinued
operations $ (0.00) $ (0.00) $ 0.00 $ 0.00
------------- ------------ ------------ ------------
Basic and Diluted Net
Loss Per Common Share $ (0.03) $ (0.01) $ (0.06) $ (0.04)
------------- ------------ ------------ ------------



CANARGO ENERGY CORPORATION AND SUBSIDIARIES

Selected Financial Information
Consolidated Condensed Balance Sheets
Expressed in United States dollars

September 30, December 31,
2006 2005
------------- -------------
(Expressed in United
States dollars)
(Unaudited) (Audited)

ASSETS

Current Assets
Cash and cash equivalents $ 17,333,598 $ 18,540,558
Restricted cash 299,928 3,181,672
Accounts receivable 915,636 413,183
Crude oil inventory 416,822 886,250
Prepayments 5,229,532 4,375,855
Assets to be disposed 6,997 5,112
Assets held for sale 600,000 600,000
Other current assets 142,929 150,712
------------- -------------
Total current assets $ 24,945,442 $ 28,153,342

Non Current Assets
Investments 154,073 -
Accounts receivable 375,099 -
Prepaid financing fees 471,664 246,910
Capital assets, net (including unevaluated
amounts of $59,600,917 and $50,644,999,
respectively) 138,590,595 119,048,049

------------- -------------

Total Assets $164,536,873 $147,448,301
------------- -------------
------------- -------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable - trade $ 2,867,258 $ 5,270,916
Loans payable - 964,142
Accrued liabilities 7,102,689 6,356,623
Liabilities to be disposed 647,376 753,966
------------- -------------
Total current liabilities $ 10,617,323 $ 13,345,647

Long term debt 39,118,021 25,000,000
Other non current liabilities 1,847,742 1,001,041
Provision for future site restoration 589,718 253,000
------------- -------------

Total Liabilities $ 52,172,804 $ 39,599,688
------------- -------------

Commitments and contingencies

Temporary Equity $ 3,899,080 $ 2,119,530
------------- -------------

Stockholders' equity:
Common stock, par value $0.10; authorized -
375,000,000 shares at September 30, 2006
and 300,000,000 at December 31, 2005; shares
issued, issuable and outstanding - 224,882,606
at September 30, 2006
and 222,586,867 at December 31, 2005 22,488,259 22,258,685
Capital in excess of par value 217,060,531 202,892,303
Deferred compensation expense - (2,220,399)
Accumulated deficit (131,083,801) (117,201,506)
------------- -------------
Total stockholders' equity $108,464,989 $105,729,083
------------- -------------

Total Liabilities, Temporary Equity and
Stockholders' Equity $164,536,873 $147,448,301
------------- -------------
------------- -------------


Contact Information

  • USA
    CanArgo Energy Corporation
    Sabin Rossi, VP External Affairs and Investor Relations
    (617) 669-1841
    (617) 973-6406 (FAX)
    Email: sabin@canargo.com
    or
    NORWAY
    Gambit H&K AS
    Regina Jarstein
    +47 (22) 048206