CANARGO ENERGY CORP

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).

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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.

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8 Mar 2006capital raising announcement▲ GoodMajor

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.

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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.

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11 Jan 2006material agreement▲ GoodMajor

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.

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27 July 2005debt financing● NeutralMajor

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.

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25 July 2005production update● NeutralMajor

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.

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