CanArgo Energy Corporation Q2 Results 2004.GUERNSEY Guernsey (gûrn`zē), island, 25 sq mi (65 sq km), in the English Channel, second largest of the Channel Islands. Guernsey bailiwick (2005 est. pop. 65,000) includes Alderney, Sark, Herm, Brechou, Jethou, and smaller islands. , British Isles British Isles: see Great Britain; Ireland. -- CanArgo Energy Corporation ("CanArgo" or the "Company") (AMEX AMEX See: American Stock Exchange :CNR See riser card. CNR - Communication and Network Riser ) (OSLO STOCK EXCHANGE Oslo Stock Exchange An exchange founded in 1819 and trading stocks, bonds, and stock options that is considered the options market of Norway. :CNR) is pleased to announce its results for the three and six months ending June June: see month. 30, 2004. In the first half of 2004, operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the was $5,439,024 compared to $3,001,453 in the same period in 2003, an increase of 81% over period. For the second quarter of 2004 operating revenue from continuing operations was $2,078,553 compared to $1,859,995 in the same period last year. Net income for the first half of 2004 was $73,611 compared to a net loss in the same period of 2003 of $1,010,798 for the same period. Net loss for the second quarter of 2004 was $1,448,769 compared to a net loss in 2003 of $103,728 for the same period. Net loss for the second quarter of 2004 was $ 0.01 per share compared to $ 0.00 in the same period of 2003. The increase in net loss for the quarter can be attributed to: additional Selling, General and Administration costs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc costs associated with increased corporate activity, a loss incurred from the disposal of the Company's interest in Lateral lateral /lat·er·al/ (-il) 1. denoting a position farther from the median plane or midline of the body or a structure. 2. pertaining to a side. lat·er·al adj. 1. Vector Resources Inc., an increase in Depreciation, Depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able and Amortization, and an increase in Other Expenses principally relating to non cash interest expense relating to the amortization of detachable warrants Detachable warrant A warrant entitles the holder to buy a given number of shares of stock at a stipulated price. A detachable warrant is one that may be sold separately from the package it may have originally been issued with (usually a bond). associated with two short term loans obtained during the quarter. The Company is currently in the process of a global offering of up to 75 million shares of common stock. A Registration Statement relating to the securities in the global offering 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 Press Release shall not constitute an offer to sell or the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful Contrary to or unauthorized by law; illegal. When applied to promises, agreements, or contracts, the term denotes that such agreements have no legal effect. The law disapproves of such conduct because it is immoral or contrary to public policy. prior to registration or qualification under the securities laws of any such jurisdiction. CanArgo Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Dr. David Robson See Robson cache. commented, "During the quarter our main focus has been on our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. development and production programme for our Georgian Geor·gian adj. 1. Of, relating to, or characteristic of the reigns of the four Georges who ruled Great Britain from 1714 to 1830. 2. Of, relating to, or characteristic of the reign of George V of Great Britain. 3. assets as we made preparations for the horizontal horizontal /hor·i·zon·tal/ (hor?i-zon´t'l) 1. parallel to the plane of the horizon. 2. occupying or confined to a single level in a hierarchy. horizontal parallel to the plane of the horizon. development drilling programme on our Ninotsminda Ninotsminda (Georgian: ნინოწმინდა, Armenian: Նինոցմինդա and Samgori Fields, and the appraisal of our Manavi Manavi is a village in the Georgian province of Kakheti. It is famous for its yellowish green wine, Manavis Mtsvane. In Georgia, wine drinking is central to the culture and is especially recommended for long celebrations. oil discovery, both of which will utilise the latest Under Balanced Coiled Tubing Coiled tubing refers to metal piping, normally 1" to 2" in diameter, used for interventions in oil and gas wells, which comes spooled on a large drum. The main benefits over wireline are the ability to pump chemicals through the coil and the ability to push it into hole rather than Drilling ("UBCTD") technology. As we recently announced the first new Samgori development well (S302) has now commenced, and operations are underway on the Manavi M11Z sidetrack well. Although our main objective remains the UBCTD programme, and this has been using most of our resources, S302 and the commencement of activities using the Slim-line Workover Coil Tubing Unit ("SWCTU") should increase production back to levels achieved in the previous quarter. This SWCTU will clean out the sediment sediment, mineral or organic particles that are deposited by the action of wind, water, or glacial ice. These sediments can eventually form sedimentary rocks (see rock). in the horizontal sections of the Ninotsminda wells with work on the first horizontal well to commence shortly. We look forward to implementing our development and appraisal programme during the remainder of the year." CanArgo is an independent oil and gas exploration and production company with its principal oil and gas operations currently located in the Republic of Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. . Further information on the Company as set forth in the Company's public filings is available at http://www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended. The Company can not give assurance that the results will be attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. .
CANARGO ENERGY CORPORATION AND SUBSIDIARIES
Financial Statements (Unaudited and subject to changes in the 10Q)
Consolidated Condensed Balance Sheets
June 30, December 31,
2004 2003
------------- -------------
(Unaudited) (Audited)
Cash and cash equivalents $ 5,118,503 $ 3,472,252
Accounts receivable 392,325 161,772
Inventory 118,961 468,793
Prepayments 1,059,334 961,588
Assets held for sale 11,409,354 10,346,077
Other current assets 147,612 206,532
------------- -------------
Total current assets $ 18,246,089 $ 15,617,014
Capital assets, net (including
unevaluated amounts of $26,748,708 and
$25,937,794 respectively) 62,887,530 57,668,233
Other Intangible assets 471,508 -
Investments in and advances to oil and
gas and other ventures - net 75,000 75,000
------------- -------------
Total Assets $ 81,680,127 $ 73,360,247
------------- -------------
------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Accounts payable - trade $ 414,352 $ 483,282
Advance from joint venture partner - 773,146
Loans payable 2,145,712 102,179
Other liabilities 6,144,576 5,473,823
Income taxes payable 33,000 97,500
Accrued liabilities 754,861 349,487
Liabilities held for sale 5,335,115 4,447,706
------------- -------------
Total current liabilities $ 14,827,616 $ 11,727,123
Provision for future site restoration 161,000 152,000
Minority interest in subsidiaries 4,187,841 4,772,683
------------- -------------
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.10;
authorized - 300,000,000 shares;
shares issued and outstanding -
113,707,089 at 2004 and 105,617,988
at 2003 11,370,708 10,561,798
Capital in excess of par value 151,094,989 146,401,804
Accumulated other comprehensive income
(deficit) 73,060 (146,463)
Accumulated deficit (100,035,087) (100,108,698)
------------- -------------
Total stockholders' equity $ 62,503,670 $ 56,708,441
------------- -------------
Total Liabilities and Stockholders'
Equity $ 81,680,127 $ 73,360,247
------------- -------------
------------- -------------
CANARGO ENERGY CORPORATION AND SUBSIDIARIES
Financial Statements(Unaudited and subject to changes in the 10Q)
Consolidated Condensed Statement of Operations
Three Months Ended Six Months Ended
June, 30 June, 30
2004 2003 2004 2003
-----------------------------------------------
(Unaudited)(Unaudited) (Unaudited) (Unaudited)
Operating Revenues from
Continuing Operations:
Oil and gas sales $ 2,078,553 $1,662,387 $5,439,024 $ 2,803,845
Other - 197,608 - 197,608
-----------------------------------------------
2,078,553 1,859,995 5,439,024 3,001,453
-----------------------------------------------
Operating Expenses:
Field operating expenses 564,622 355,174 1,232,959 697,975
Direct project costs 346,668 257,544 627,135 424,130
Selling, general and
administrative 1,213,706 674,830 2,125,308 1,404,884
Non cash stock
compensation expense - - - 276,507
Depreciation, depletion
and amortization 926,224 717,153 1,807,045 1,295,791
Gain (loss) on
disposition of
subsidiary 19,937 - (335,014) -
-----------------------------------------------
3,071,157 2,004,702 5,457,433 4,099,287
-----------------------------------------------
Operating Loss from
Continuing Operations (992,604) (144,707) (18,409) (1,097,834)
-----------------------------------------------
Other Income (Expense):
Interest, net (248,913) (3,575) (256,386) (5,879)
Other (163,130) (3,924) (98,720) (11,330)
Equity income from
investments - 21,515 - 43,030
-----------------------------------------------
Total Other Income
(Expense) (412,043) 14,016 (355,106) 25,821
-----------------------------------------------
Loss from Continuing
Operations Before
Minority Interest and
Taxes (1,404,647) (130,691) (373,515) (1,072,013)
Minority interest
in loss (income)
of consolidated
subsidiaries (583) 23 301 23
-----------------------------------------------
Loss from Continuing
Operations (1,405,230) (130,668) (373,214) (1,071,990)
Net Income (Loss) from
Discontinued Operations,
net of taxes and
minority interest (43,539) 26,940 446,825 19,902
Cumulative effect of
change in accounting
principle - - - 41,290
-----------------------------------------------
Net Income (Loss) $(1,448,769) $(103,728) $ 73,611 $(1,010,798)
-----------------------------------------------
-----------------------------------------------
Weighted average
number of common
shares outstanding
- Basic 113,006,430 97,356,206 109,868,598 97,356,206
-----------------------------------------------
- Diluted 113,006,430 97,356,206 112,690,648 97,356,206
-----------------------------------------------
Basic Net Income (Loss)
Per Common Share - Before
Cumulative Effect of
Change in Accounting
Principle
- from continuing
operations $ (0.01) $ (0.00) $ (0.00)$ (0.01)
- from discontinued
operations $ (0.00) $ 0.00 $ 0.00 $ 0.00
- cumulative effect of
change in accounting
principle, net of
Income tax $ - $ - $ - $ 0.00
-----------------------------------------------
Net Income (Loss) Per
Common Share - Basic $ (0.01) $ (0.00) $ 0.00 $ (0.01)
-----------------------------------------------
Diluted Net Income (Loss)
Per Common Share - Before
Cumulative Effect of
Change in Accounting
Principle
- from continuing
operations $ (0.01) $ (0.00) $ (0.00)$ (0.01)
- from discontinued
operations $ (0.00) $ 0.00 $ 0.00 $ 0.00
- cumulative effect
of change in
accounting
principle, net of
Income tax $ - $ - $ - $ 0.00
-----------------------------------------------
Net Income (Loss) Per
Common Share
- Diluted $ (0.01) $ (0.00) $ 0.00 $ (0.01)
-----------------------------------------------
Other Comprehensive
Income:
Foreign currency
translation (242,613) (54,246) 219,523 (24,081)
-----------------------------------------------
Comprehensive Income
(Loss) $(1,691,382) $(157,974) $ 293,134 $(1,034,879)
-----------------------------------------------
-----------------------------------------------
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