CanArgo announces Letter of Intent with AES on Gas Exploration in Georgia.

Business Editors

CALGARY, Alberta and OSLO, Norway--(BUSINESS WIRE)--March 14, 2000

CANARGO (OTCBB:GUSH) CanArgo Energy Corporation (OTCBB:GUSH) (OSE:CNR) is pleased to announce that its subsidiary, Ninotsminda Oil Company ("NOC") has signed a Letter of Intent (LOI) with subsidiaries of AES Corporation (AES), relating to exploration and potential future development of gas prospects in NOC's acreage in Georgia.

The LOI contemplates AES earning a 50% interest in identified prospects at the Cretaceous stratigraphic level, by funding a portion of the cost of three exploration wells. The program would be implemented by CanArgo's existing operations unit in Georgia, directed jointly by CanArgo and AES. A final agreement is subject to negotiation of satisfactory formal agreements, board approvals and any necessary regulatory approvals.

In addition the LOI covers the general terms of a long term gas sales contract which would be entered into in the event of a successful development. NOC is currently supplying gas to AES under an existing contract from the shallower Middle Eocene reservoir in its producing Ninotsminda field; the gas being utilized for power generation at the nearby Gardabani thermal power plant.

CanArgo has identified several drillable gas prospects in the NOC acreage, based on recently acquired seismic data. On an unrisked basis, these prospects could potentially yield in excess of 1 trillion cubic feet of gas.

Dr. David Robson, Chairman and CEO of CanArgo commented "We have been working successfully with AES with our current gas supply contract, and I am very pleased that we have the potential to expand our already excellent relationship."

CanArgo Energy Corporation is an 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.

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.