CanArgo Energy Corporation

CanArgo Energy Corporation

May 07, 2009 11:02 ET

CanArgo Updates Status

GUERNSEY, BRITISH ISLES--(Marketwire - May 7, 2009) - CanArgo Energy Corporation ("CanArgo" or the "Company") (OSE:CNR) (PINK SHEETS:CANR) today announced an update of its current status. The Company is continuing its operations in Georgia; however, through the end of the first fiscal quarter ended March 31, 2009 it continues to operate at a loss. The Company is attempting to further reduce corporate expenses however it remains financially impaired, in default of its obligations under its issued and outstanding subordinated notes and certain other obligations. While the Company hopes to prepare and issue preliminary unaudited financial statements reflecting the results of the first fiscal quarter, given its lack of relevant resources it is unlikely at this point that the Company will be able to file an Annual Report on Form 10-K for the fiscal year ended December 31, 2008 or a Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009 with the Securities and Exchange Commission and, accordingly, will continue to be delinquent in its filings under the Securities Exchange Act of 1934. The Company is also continuing its negotiations with creditors in respect of its defaulted obligations with a view to arriving at a restructuring plan which, under current expectations, will involve a possible debtor in possession restructuring in Chapter 11 of the United States Bankruptcy Code. There is no assurance, however, that the Company will be successful in its efforts.

Shareholders, creditors and other interested parties should consult the Company's website for further updates on the Company's status.

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

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, among other matters, the uncertainties inherent in oil and gas activities; the effects of the Company's impaired financial condition; the effects of actions by third parties including creditors and government officials; fluctuations in world oil prices and other risks detailed in the Company's reports on Forms 10-K and 10-Q previously filed with the Securities and Exchange Commission; the ability of the Company and its subsidiaries to arrive at a successful negotiation with its creditors and to prosecute, develop and consummate one or more plans of reorganization with respect to any possible Chapter 11 proceeding; the effects of any possible Chapter 11 filing on the Company and the interests of various creditors, equity holders and other constituents; Bankruptcy Court rulings in any possible Chapter 11 case and the outcome of any such proceedings in general; the length of time the Company will operate under a possible Chapter 11 proceeding; the risks associated with third party motions in any possible Chapter 11 proceeding, which may interfere with the Company's ability to develop and consummate one or more plans of reorganization; the potential adverse effects of a possible Chapter 11 proceeding on the Company's liquidity or results of operations; continued compliance with conditions for funding under any secured credit facility that may be obtained to fund the Company while in any possible Chapter 11 proceeding; the ability to execute the Company's business and restructuring plan; management of cash resources; restrictions imposed by, and as a result of, the Company's substantial leverage; increased legal costs related to a possible bankruptcy case and other litigation and the Company's ability to maintain contracts that are critical to its operation, to obtain and maintain normal terms with customers, suppliers and service providers and to retain key executives, managers and employees. 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.

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