CanArgo Energy Corporation Files Registration Statement.

CALGARY, ALBERTA, HOUSTON AND OSLO, NORWAY--(BUSINESS WIRE)--Feb. 12, 1999--CanArgo Energy Corporation (NASDAQ:GUSH) announced today that it had filed a registration statement on Form S-1 with the United States Securities and Exchange Commission.

CanArgo is registering 21,264,643 shares of Common Stock for a proposed public offering to raise additional capital. CanArgo intends to provide the holders of its Common Stock and the holders of Exchangeable Shares issued by its CanArgo Oil & Gas Inc. subsidiary, which may be exchanged for CanArgo Common Stock on a share-for-share basis, with priority rights to subscribe in this offering for a number of shares equal to the number of shares held.

CanArgo expects to decide the record date for determining those stockholders entitled to priority rights and the period during which the priority rights will apply when the timing of the proposed offering becomes more predictable. The offering will be made only by means of a prospectus after the registration statement is declared effective.

CanArgo also announced that its Board of Directors had approved and the Company would be presenting to its stockholders at the next Annual Meeting, expected to be held in the spring, a proposal to effect a 1-for-10 reverse split of CanArgo's Common Stock.

A principal purpose for the proposed combination of ten existing shares into a single share is to bring the trading range for CanArgo's Common Stock into compliance with the minimum price requirements for continued listing on the Nasdaq Stock Market. Nasdaq has scheduled a hearing regarding CanArgo's status in relations to Nasdaq continued listing standards.

CanArgo Energy Corporation is an independent oil & gas exploration and production company operating in Eastern Europe. The Company's activities include downstream operations such as independent power production, oil refining and marketing. CanArgo's corporate strategy is to develop locally managed business units with a focus on early cash flow and business upside.

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

This news release shall not constitute a solicitation of proxies with respect to any securities.

A written prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, may be obtained when available from Susan E. Palmer, Corporate Secretary, CanArgo Energy Corporation, 1400 Broadfield Boulevard, Houston, Texas 77084.

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 need for regulatory approvals and the possibility that intervening events may cause the Company to alter its plans and proposals. For a more complete discussion of such risks, uncertainties and other factors, see CanArgo's reports on Form 10-K and 10-Q, as amended, filed with the Securities and Exchange Commission.