CanArgo Energy Corporation: Georgian Drilling Programme.

Energy Editors/Business Editors

TBILISI, Georgia--(BUSINESS WIRE)--March 15, 2004

CanArgo Energy Corporation (OTCBB:GUSH) (OSE:CNR) today announced its planned Georgian drilling programme for the remainder of the year.

This programme is focused on further horizontal development wells on the Ninotsminda Field, commencement of the horizontal development programme on the Samgori Field and appraisal of the Manavi oil discovery.

The programme will be based around the utilisation of Under Balanced Coiled Tubing Drilling (UBCTD) to optimally drill the development wells. This technique, which is used internationally but has so far not been applied in Georgia, involves drilling the wells using coiled tubing, rather than conventional drillstring, and producing the wells whilst drilling. This technique will minimise formation damage, increase the potential length of the horizontal section, and reduce the risk of fracturing the reservoir down to the water zone when drilling the wells. As a result production levels for the horizontal wells should be optimised. Negotiations are underway with an internationally renowned oilfield service company which specialises in such work. Coiled tubing is also planned to be used on the Manavi M11 well which almost certainly will require a sidetrack due to collapse of the production tubing during the initial testing of the Cretaceous oil discovery.

The UBCTD unit will need to be mobilised to Georgia. However the coil and spool will first need to be specially manufactured for this programme. As such, it is unlikely that the unit will be ready to commence the programme before August, but once work begins each well should take no longer than three weeks to complete. In the interim period CanArgo will start preparation work using its conventional rigs on the target wells for the UBCTD. This will involve milling a suitable window to drill the horizontal section, and in some instances sidetracking the well to the top of the Middle Eocene reservoir. It is also planned to used conventional drilling techniques on the Manavi M11 well to sidetrack the well to the top of the Middle Eocene.

In order to minimise mobilisation and other costs per well, a programme of up to 15 well bores is planned for the UBCTD unit. Five of these are planned on the Ninotsminda Field, and the remainder on the Samgori Field. The Ninotsminda wells include well N22, the eastern multilateral from well N100, and the eastern step out well N99. Certain conditions need to be satisfied before CanArgo takes over its planned 50% interest in the Samgori Field and Block XIB Production Sharing Contract, but it is hoped that these conditions will be satisfied in the near future. However technical discussions are already underway with respect to identifying the candidate wells for horizontal sidetracks on the Samgori Field, as is the extension of the Ninotsminda Field dynamic reservoir model over the Samgori area and it is expected that this will integrate with and direct the planned UBCTD programme.

In addition to the planned Manavi M11 sidetrack, at least one appraisal well (M12) is planned on the Manavi oil discovery this year. A location has been chosen and negotiations are underway with an international drilling contractor to supply a high technology drilling rig equipped with a 'Top Drive' drilling system to drill this well. Utilising this equipment for what is planned to be a 5,000 metre well should result in faster drilling times than utilising CanArgo's existing equipment which will be focused on preparation work for the UBCTD programme. The M12 well is expected to spud in June/July.

Regarding the recent news from Georgia concerning the semi-autonomous region of Adjara in south western Georgia. CanArgo points out that this dispute is localised in that area and that it has no affect on its operations which continue to progress as normal.

Dr David Robson, Chief Executive Officer commented; "We have an exciting and aggressive programme in Georgia for the remainder of this year, focused both on development of our producing fields and on appraisal of our Manavi discovery. I believe that the use of high technology equipment will ensure that we can achieve the optimum production rates from our development programme, and minimise drilling times in our appraisal activities. We have a considerable amount of preparation work to do for the UBCTD programme and we will be commencing this work imminently, but this does mean that we will not be bringing on-stream any new production wells before the UBCTD unit arrives. We have extremely attractive opportunities in Georgia right now and I believe we should move forward quickly to develop these opportunities. To progress this programme we require our shareholders to support the expansion of the Company's authorised share capital at the Special Shareholders' Meeting planned for 23rd March. I urge any of our shareholders who have not yet returned their proxy form to do so as the last day to return this in Norway is Wednesday 17th March and Monday 22nd March in the United States. I look forward to implementing this exciting programme in 2004."

CanArgo is an independent oil and gas exploration and production company with its oil and gas operations currently located in the Republic of Georgia and the Caspian area. Further information on the Company is available at www.canargo.com and at http://www.sec.gov.

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 harbor 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.