CanArgo and JKX Conclude Share Swap On Georgian License.

Business Editors

CALGARY, Alberta & OSLO, Norway & LONDON--(BUSINESS WIRE)--May 19, 2000

CanArgo Energy Corporation (OTCBB:GUSH)(OSE:CNR) and JKX Oil & Gas plc (LSE:JKX) announced that an agreement has been reached for JKX to exchange its 21.2% interest in Ninotsminda Oil Company ("NOC") for a direct equity interest in CanArgo.

Subject to necessary consents, upon completion of this transaction, NOC will become a wholly owned subsidiary of CanArgo. The transaction values JKX's interest at US$4.5 million, with the issuance of 4,054,054 common shares of CanArgo at a deemed price of US$1.11 per share. The share price, calculated at the time of negotiating the deal, was based on the 10 day weighted average trading price of CanArgo's common shares on the Oslo Stock Exchange and the OTC Bulletin Board. Under the terms of the agreement the shares will not be traded for one year.

NOC holds a licence on producing assets and exploration prospects in the Republic of Georgia, close to the capital, Tbilisi. In addition to its development activities on the field, CanArgo anticipates initiating a significant gas exploration program on the Ninotsminda license this summer.

David Robson, Chairman and Chief Executive Officer of CanArgo Energy, commented: "We are very pleased to have concluded this agreement with JKX. I feel confident this acquisition will add value to our shareholders which now include JKX."

Paul Davies, Chief Executive Officer of JKX, also commented: "This corporate deal aligns the interests of both companies in maximizing the value of the Ninotsminda asset."

CanArgo Energy Corporation is a dynamic independent oil and gas exploration and production company operating in Eastern Europe. CanArgo's principal oil and gas operations are located in the Republic of Georgia. The Company's activities at its primary field in Georgia, the Ninotsminda field, are conducted through its subsidiary, Ninotsminda Oil Company Limited. In addition, the Company has interests in several other oil and gas prospects and in refining, marketing, independent power production and oilfield technology activities.

JKX is an oil and gas exploration and production company listed on the London Stock Exchange. The company has licence interests in Ukraine, Georgia, Italy and the Russian sector of the Caspian Sea.

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 anticipated herein will be attained.