Each one in plain English, with the numbers worked through for a shareholder.
18 June 2007capital raising announcement● NeutralMajor
On June 13, 2007 CanArgo finalised the earlier debt-for-Tethys-shares swap: US$15 million of its notes were converted into 6 million Tethys shares, leaving CanArgo with 8 million Tethys shares, about 29.7% of Tethys. The converting holders received compensatory warrants over CanArgo stock (11.1 million at US$0.90 for Ingalls & Snyder and 5 million at US$1.00 for Persistency). Separately, noteholders agreed that the roughly US$2.1 million of interest due June 30, 2007 would be paid with new notes on the same terms instead of cash, convertible into up to 2,250,000 CanArgo shares. This completes the pending conversion, but CanArgo's Tethys stake is now below the roughly 67% held after February and interest is being deferred into more debt, which adds potential dilution. A Toronto Stock Exchange conditional approval for a Tethys listing (subject to an IPO) replaces the earlier AIM plan.
11 June 2007capital raising announcement● NeutralMajor
On June 5, 2007 CanArgo agreed to convert US$10 million of its senior secured notes and US$5 million of the subordinated notes into 6 million Tethys shares at US$2.50 each, with the shares supplied by CanArgo Limited. The conversion was due about five business days later. As compensation, the converting holders get warrants over CanArgo shares: 11,111,111 at $0.90 for the senior holders and 5 million at $1.00 for Persistency. This reduces CanArgo's debt by US$15 million but hands over some of its Tethys stake and adds potential dilution. Other note holders also consented, and CanArgo Limited may sell Tethys shares at a minimum of US$2.50.
On February 15, 2007 Tethys Petroleum Limited, CanArgo's Kazakhstan subsidiary, issued about 34.7 million shares to outside investors for about US$17.3 million gross (US$16.8 million net), roughly 33% of Tethys. Proceeds fund Tethys and its Kazakh subsidiary, and the investors are working toward a listing of Tethys. In connection with this, the holders of the senior secured, US$13 million subordinated and 12% notes agreed to release Tethys and its Kazakh subsidiary from their guarantees. A new pledge covers the Tethys shares CanArgo Limited holds. CanArgo therefore no longer owns all of its Kazakh business, and Tethys now has minority shareholders with consent rights over key decisions.
13 Oct 2006capital raising announcement● NeutralMajor
Effective October 12, 2006 CanArgo issued 12,263,368 new shares in a private placement in Norway for gross proceeds of NOK 111.6 million (about $16.7 million), with estimated fees of about $1.0 million. Because registering the shares was delayed, it also paid subscribers a cash penalty of about $0.83 million (5% of the subscription price). The money is for working capital and future Georgian spending, including securing drilling equipment. This is the first equity raise in this stretch and it dilutes existing shareholders, and it appears to be the offering CanArgo had been seeking to register since 2005 (inference).
5 July 2006capital raising announcement● NeutralMajor
On June 28, 2006 CanArgo sold US$10 million of 12% Subordinated Convertible Guaranteed Notes due June 28, 2010 to Persistency, with warrants over 12.5 million shares at $1.00. The notes convert into shares at $1.00 and the money is for Georgia (Ninotsminda development and Kumisi appraisal). Holders of the March 2006 US$13 million notes also agreed to convert them into shares of subsidiary Tethys Petroleum Investments if Tethys is admitted to London's AIM market, in exchange for new warrants over 13 million CanArgo shares at $1.00. Persistency separately bought US$5 million of those March notes. This adds debt at a higher interest rate and brings more potential dilution for existing shareholders.
On March 3, 2006 CanArgo raised US$13 million through Senior Subordinated Convertible Guaranteed Notes due September 1, 2009, arranged by Ingalls & Snyder, plus warrants over 13,000,000 shares at $1.37. The notes pay 3% interest until Dec 31, 2006 and 10% after that, and convert into CanArgo shares at $1.37 (or, for one year, into Tethys shares). Proceeds are for the Kyzyloi gas field and committed exploration in Kazakhstan, so the money follows the gas contract signed in January. The notes rank behind the 2005 senior secured notes, and conversion is capped at 19.9% of shares outstanding unless shareholders approve. The same filing reports a non-binding memorandum of understanding (MOU) for Georgian state gas sales from the Kumisi prospect near Tbilisi, a take-or-pay contract starting at US$55 per thousand cubic metres and rising to US$80 by year ten, effective subject to final regulatory approval, with a well planned between May and December 2006.
21 Feb 2006material agreement termination▼ BadMajor
CanArgo's subsidiary CanArgo Samgori Limited withdrew from the Samgori (Block XIc) production sharing contract in Georgia effective February 16, 2006. The filing says its partner Georgian Oil's Samgori subsidiary could not fund its share, and CanArgo would not fund the project alone without different terms and a longer commitment period. The project added about $0.8 million of net revenue in 2005, and about $1.25 million of costs have been capitalised since 2004. CanArgo reports no material early termination penalties and says it will focus on Ninotsminda horizontal wells, Manavi, the Norio MK72 test, and Kazakhstan.
On January 5, 2006 CanArgo's Kazakh subsidiary BN Munai signed a gas supply contract with Gaz Impex covering all gas from the Kyzyloi field, running to the earlier of June 2014 or the end of the underlying licences. It is take-or-pay at an average of about $32 per thousand cubic metres ($0.91 per thousand cubic feet), with bank guarantees against payment. This sets a buyer and price for the Kyzyloy gas development financed by the 2005 notes. The filing also notes a registration statement for a proposed secondary share offering has been filed but is not yet effective.
On July 25, 2005 CanArgo placed US$25 million of Senior Secured Notes due July 25, 2009 with private investors arranged by Ingalls & Snyder. The notes pay 3% interest to the end of 2005, 10% in 2006 and 15% from 2007, are convertible into shares at US$0.90 (reset lower if shares are later issued below that), and are secured on all CanArgo assets with pledges of the shares in key subsidiaries. Proceeds, after about US$550,000 of costs, are to repay about US$7.5 million owed to Cornell, fund appraisal of a new Georgia gas project and development of the Kyzyloy gas field in Kazakhstan, and add working capital. CanArgo is also terminating its Standby Equity Distribution Agreement with Cornell, ending that equity-funding route. The rising interest rate and conversion feature mean higher cost and possible dilution for shareholders.
In a July 21, 2005 operational update, CanArgo said Weatherford is leaving Georgia after working on three Ninotsminda wells over seven months without completing any; less than 150 metres of horizontal section was drilled against a plan of up to 650 metres per well. CanArgo is reviewing its Weatherford contract, is negotiating with other suppliers of the same drilling technology, and plans up to two conventionally drilled horizontal wells, the first (N100H2) within six to eight weeks. At Manavi, the M11Z sidetrack has 5-inch casing set at 4,007 metres and shows signs of hydrocarbons in the Middle Eocene; it will be drilled to 4,500 metres and tested in August 2005. The Norio MK72 well has restarted after CanArgo completed acquisition of 100% of the Norio PSA, and in Kazakhstan the Kyzyloy gas field is being worked over with first gas expected before the end of 2005, plus 5 shallow exploration wells planned this year. The Ninotsminda setback is negative; Manavi and Norio are progress. Kazakhstan is newly disclosed here as a company interest.
On May 9, 2005 CanArgo furnished a press release with a general drilling update and a link to its annual general meeting presentation and webcast. The filing itself gives no drilling results or figures; they sit in the press release exhibit, which is not reproduced here.
On April 26, 2005 CanArgo signed a new US$15,000,000 promissory note with Cornell Capital Partners at 7.5% interest, due within 270 days, repayable in cash or from drawdowns under the existing Standby Equity Distribution Agreement (SEDA) of Feb 2004. 25 SEDA advance requests (each at least $600,000) plus one of $305,136.99 and 16,938,558 shares are placed in escrow and released weekly from May 2, 2005 unless CanArgo has paid Cornell in cash, so repaying in cash avoids the share sales. CanArgo can cancel up to 5 advance notices or repay early on 24 hours' notice. The filing says the money gives more flexibility for its Georgia development and appraisal program. This adds to the earlier smaller Cornell note.
7 Feb 2005material agreement termination▲ GoodMajor
On February 4, 2005 Ninotsminda Oil Company replaced its May 2004 oil sales contract with Primrose Financial Group with a new one lasting at least 45 months, covering its whole share of Ninotsminda Field output priced at a discount to Brent. It repays Primrose's US$2,300,000 security deposit early; the filing says NOC obtained better commercial terms.
On January 27, 2005 CanArgo's subsidiary Ninotsminda Oil Company signed a day-rate contract with Saipem to drill the M12 appraisal well on the Manavi oil discovery in Georgia to a planned 5,000 metres, with an option for up to two more wells. It replaces an earlier contract with Great Wall Drilling, which CanArgo dropped because of a delay in getting that rig in place; drilling is expected to begin by end of April or early May.
On December 21, 2004 CanArgo and Cornell Capital Partners amended the $1,500,000 promissory note dated May 19, 2004 so that accrued interest is paid in cash only. The filing does not say what the previous interest terms were.
After CanArgo raised US$37.5 million gross in a global public offering on September 22, 2004, repayment of its short-term loans was triggered. It repaid the £170,000 CA Fiduciary loan on September 28 and Mr Ozturk's original US$1 million loan on September 30; his additional $1 million convertible loan and the warrant agreements remain in place.
6 Oct 2004capital raising announcement● NeutralMajor
On September 30, 2004 CanArgo issued 6 million restricted shares (valued at US$4,320,000 at that day's closing price) to NPET Oil Limited in exchange for NPET's 25% interest in CanArgo Norio Limited. This raises CanArgo's stake in that subsidiary (previously 64.2%, per the July 2003 release) at the cost of issuing new shares.
31 Aug 2004capital raising announcement● NeutralMajor
On August 27, 2004 CanArgo borrowed a further $1,000,000 from Salahi Ozturk, repayable in two years and one day and convertible into shares at $0.69 each (not before one year), and extended his April 2004 loan to one year and one day. He gets a new warrant for 2,000,000 shares at $0.63 replacing his earlier 1,000,000-share warrant at $1.05; conversion and the warrant could add shares for existing holders to absorb.
CanArgo engaged L J Soldinger Associates as its new auditor on July 2, 2003, resolving the open auditor question after PwC's resignation; the company's press release says the move came from a cost review and that this firm suits a company of its size. The filing also furnished a July 3 press release that CanArgo Norio Limited (64.2% owned by CanArgo) signed a production sharing contract for Blocks XIG and XIH in eastern Georgia, with a total commitment of $350,000 over four years.
PricewaterhouseCoopers resigned as CanArgo's auditor on June 23, 2003. Its report on the 2002 accounts included a going-concern warning (doubt about the company's ability to continue), and the filing states there were no disagreements with the company. No new auditor had been chosen yet.
18 July 2001asset acquisition disposition● NeutralMajor
CanArgo advanced Cdn. $929,811 (about US $604,000) on July 5, 2001 to complete its acquisition of Lateral Vector Resources (LVR), which has a joint investment production agreement with Ukrnafta on the Bugruvativske oil field in eastern Ukraine. It also closed a private placement of about 16 million shares for net proceeds of about $6.8 million, to replenish cash used for the LVR purchase, start developing its Ukrainian properties and for working capital; the press release says this replaces a planned convertible bond, which will not be issued.
