CanArgo Energy Corporation: N22H Well Re-Scheduled.

TBILISI, Georgia -- CanArgo Energy Corporation (AMEX:CNR) (OSE:CNR) ("CanArgo") today announced that it has re-scheduled the Ninotsminda Field N22H horizontal well, the first well in the planned Under Balanced Coiled Tubing Drilling ("UBCTD") development program being carried out in conjunction with Weatherford International, due to a fault in the directional drilling equipment.

This should not affect the overall timing of the UBCTD program as it is now planned to drill three wells consecutively commencing at the end of January with no break in activities. Previously the first well was to be drilled with an end of year break followed thereafter by two wells every four weeks with a break thereafter. Three consecutive wells would allow the program to get back on schedule.

CanArgo Energy Corporation and Weatherford International have successfully mobilized over 500 tons of UBCTD equipment to the Ninotsminda 22 well site in the Republic of Georgia. The rig up on the first well was completed despite the coldest weather experienced in Georgia since 1994 with temperatures at the well site falling to some -20 degrees C.

The cement shoe in the 4 1/2" liner was successfully drilled together with a short distance of new formation. At this point in time an error was detected in the down-hole telemetry equipment and despite intensive efforts it has proven impossible to fix without taking these items to the UK and Norway for repair. As this equipment is critical for steering the well trajectory and maintaining underbalanced conditions, it was mutually agreed to temporarily suspend drilling operations in order to fix the problem.

It is anticipated that drilling operations shall recommence about January 26, 2005. It is planned to then drill Ninotsminda horizontal UBCTD wells 22, 100 and 49 without a break to bring the program back on schedule.

On the appraisal of the Manavi oil discovery, drilling operations are progressing satisfactorily on the on the M11Z sidetrack well which is currently at a depth of approximately 3,393 meters (11,132 feet).

Dr David Robson, CanArgo's CEO commented, "Whilst this is frustrating for our team in Georgia it is only a short-term problem and we are working with Weatherford to bring the program back on track by early next year. This should not affect our program as a whole, however the initial results will now be realised in early February 2005 instead of January 2005".

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.

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.