Canargo Announces First Quarter Results.Business Editors OSLO Oslo (äz`lō, äs`–, Nor.  s`l), city (1995 pop. 482,555), capital of Norway, of Akershus co., and of Oslo co. , Norway Norway, Nor. Norge, officially Kingdom of Norway, constitutional monarchy (2005 est. pop. 4,593,000), 125,181 sq mi (324,219 sq km), N Europe, occupying the western part of the Scandinavian peninsula. AND LONDON--(BUSINESS WIRE)--May 15, 2001
CanArgo Energy Corporation ("CanArgo") (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :GUSH) (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 See riser card. CNR - Communication and Network Riser ) today announced its results for the quarter ended March 31, 2001. Revenues for this quarter increased by over 50% to some $3.6 million compared to the quarter ended December December: see month. 31, 2000. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was approximately $1,000,000. Net income (loss) for the quarter was $0.00 per share. The revenue increase was principally due to increased income from the company's gasoline gasoline or petrol, light, volatile mixture of hydrocarbons for use in the internal-combustion engine and as an organic solvent, obtained primarily by fractional distillation and "cracking" of petroleum, but also obtained from natural gas, by stations, which have shown strong growth over the quarter, and continue to expand. Costs have increased however, this being principally due to additional activity both in the upstream From the consumer to the provider. See downstream. (networking) upstream - Fewer network hops away from a backbone or hub. For example, a small ISP that connects to the Internet through a larger ISP that has their own connection to the backbone is downstream from the larger and downstream From the provider to the customer. Downloading files and Web pages from the Internet is the downstream side. The upstream is from the customer to the provider (requesting a Web page, sending e-mail, etc.). businesses, together with costs associated with the acquisition of 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., which was underway during the quarter. Production from the Ninotsminda oilfield averaged approximately 1,500 barrels of oil and 6 million cubic feet of gas per day during the quarter, with oil production showing a significant increase on the previous quarter. However operational constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. connected with the drilling of exploration well N100, together with further evaluation of the upper reservoirs have limited current production potential in the short term. Sales agreements have recently been concluded for gas offtake Off´take` n. 1. Act of taking off; specif., the taking off or purchase of goods. 2. Something taken off; a deduction. 3. A channel for taking away air or water; also, the point of beginning of such a channel; a take-off. to alternative buyers following the temporary shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down of the Gardabani thermal power plant, and negotiations are underway to increase margins on gas sales. Exploration well N100, being drilled for the deep Cretaceous prospect below Ninotsminda is currently drilling ahead through the main Middle Eocene reservoir at some 2,500 metres. Whilst this drilling is underway, for safety reasons production must be shut-in shut-in n. A person confined indoors by illness or disability. adj. 1. Confined to a home or hospital, as by illness. 2. Disposed to avoid social contact; excessively withdrawn or introverted. from some nearby producing wells. Well N97, which discovered oil in the shallow Sarmatian reservoir, was deepened to the Middle Eocene, with cores and logs being taken over the Sarmatian and Upper Eocene section. Testing of the Middle Eocene sequence will now take place, followed by tests on selected upper section reservoirs, followed by production using dual-completion methods. Drilling of the next Cretaceous exploration well, M11, located on the Manavi structure, and the second well of a three well drilling Well drilling is the process of drilling a hole in the ground for the extraction of a natural resource such as ground water, natural gas, or petroleum. Drilling for the exploration of the nature of the material underground (for instance in search of metallic ore) is best described programme with AES, is expected to commence later this month. The company's Georgian downstream business is developing well, with a further two gasoline stations having being opened this week. Construction of the additional stations remains on schedule. Sales from the existing five operational stations are currently supplying some 5% of the Tbilisi area retail demand. Progress has also been made on the company's refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar operations, which have recently been hampered by taxation issues related to excise duties excise duties npl → impôts indirects excise duties excise npl → Verbrauchssteuern pl excise duties npl → . The Georgian Parliament has now made changes to the Tax Code that significantly reduces excise A tax imposed on the performance of an act, the engaging in an occupation, or the enjoyment of a privilege. A tax on the manufacture, sale, or use of goods or on the carrying on of an occupation or activity, or a tax on the transfer of property. duty on the import of octane oc·tane n. 1. Any of various isomeric paraffin hydrocarbons with the formula C8H18, found in petroleum and used as a fuel and solvent. 2. An octane number. enhancing additives for the refining industry, and provide certain other offsets. These changes are expected to enable the refinery owned by Georgian American Oil Refinery (CanArgo interest 51%) to recommence Re`com`mence´ v. i. 1. To commence or begin again. 2. To begin anew to be; to act again as. He seems desirous enough of recommencing courtier. - Johnson. v. t. 1. To commence again or anew. importation of suitable additives and recommence economic refining operations. In addition, agreement has been reached on commercial sales arrangements with the major importers of oil products into 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. which should further stabilise Verb 1. stabilise - support or hold steady and make steadfast, with or as if with a brace; "brace your elbows while working on the potter's wheel" brace, stabilize, steady the market for domestically produced product. In Ukraine, the pilot development programme on the Stynawske oilfield (CanArgo interest 45%) has commenced, with the first workover now underway. During the quarter, gross production averaged some 380 barrels of oil, plus 2.5 million standard cubic feet of gas per day. The acquisition of Lateral Vector Resources Inc. was underway during the quarter, with the offer being declared unconditional HEIR, UNCONDITIONAL. A term used in the civil law, adopted by the Civil Code of Louisiana. Unconditional heirs are those who inherit without any reservation, or without making an inventory, whether their acceptance be express or tacit. Civ. Code of Lo. art. 878. UNCONDITIONAL. on April 24th. Through this acquisition, CanArgo intends to significantly develop its oil production operations in Ukraine, working on the Bugruvativske oilfield west of the city of Kharkov. Dr. David Robson, Chief Executive Officer and Managing Director of CanArgo said: "The first quarter results show the real impact which our downstream business can have on CanArgo. Whilst we are still in an early stage of development, I look forward to further positive impact as activities expand. I am very pleased to see the improvements in taxation that affect our refining business. Our refining operation in Georgia has been through a challenging time recently, but with the support of the Georgian government for domestic refining I look forward to a positive future, with potential for significant expansion. On the upstream business, we continue to work hard on both our development and exploration programmes in Georgia. However we have significant evaluation work to do on the newly discovered reservoirs, and unfortunately the close proximity of our exploration and development activities, together with our need for additional field data, has led to a slower production build up than we had hoped. Nonetheless the programmes are moving forward positively and I look forward to the results of this work in the not too distant future. I am very excited about our new activities in Ukraine. Production from the Stynawske field is now accruing to our joint venture from which the joint venture is covering its day-to-day operating and some capital costs. I am hopeful that this will increase in the short term as the development programme gets fully underway. I am also looking forward to the real and substantial opportunity presented by the acquisition of Lateral Vector Resources and the Bugruvativske field. This has the potential for significant early production, and we are working quickly to progress these activities, both corporately, and with our Ukrainian partners." CanArgo is an independent oil and gas exploration and production company operating in Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. . CanArgo's principal oil and gas operations are currently located in the Republic of Georgia and more recently in Ukraine. 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 CanArgo'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 CanArgo'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. CanArgo cannot give assurance that the results anticipated herein 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
Consolidated Condensed Balance Sheet
Unaudited
---------------------------
March 31, December 31,
2001 2000
----------- --------------
ASSETS
Cash and cash equivalents $ 18,512,731 $ 28,627,013
Accounts receivable 1,531,960 786,570
Advances to operator 4,989,378 1,146,584
Inventory 432,592 695,909
Other current assets 351,558 334,402
----------- --------------
Total current assets $ 25,818,219 $ 31,590,478
Capital assets 53,067,104 50,477,344
Investments in and advances to oil
and gas and other ventures - net 772,006 696,374
Deferred acquisition costs 139,178 -
----------- --------------
Total Assets $ 79,796,507 $ 82,764,196
----------- --------------
----------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 2,384,193 $ 2,691,118
Advances from joint venture partner 1,937,781 5,888,573
Accrued liabilities 198,936 323,936
----------- --------------
Total current liabilities $ 4,520,910 $ 8,903,627
Provision for future site restoration 50,290 40,990
Minority interest in subsidiaries 3,125,724 1,393,915
Stockholders' equity:
Preferred stock, par value $0.10
per share - -
Common stock, par value $0.10 per
share 7,595,069 7,595,069
Capital in excess of par value 139,071,031 139,071,031
Accumulated deficit (74,566,517) (74,240,436)
----------- --------------
Total stockholders' equity $ 72,099,583 $ 72,425,664
----------- --------------
Total Liabilities and Stockholders'
Equity $ 79,796,507 $ 82,764,196
----------- --------------
----------- --------------
CANARGO ENERGY CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
Unaudited
---------------------------
March 31, December 31,
2001 2000
----------- --------------
Operating Revenues:
Oil and gas sales $ 1,748,195 $ 1,884,676
Refining and marketing 1,849,608 -
Other - 196,300
----------- --------------
3,597,803 2,080,976
----------- --------------
Operating Expenses:
Field operating expenses 502,217 372,596
Purchases of crude oil and products 1,157,724 -
Refinery operating expenses 120,406 -
Direct project costs 249,580 136,309
General and administrative 927,889 373,874
Depreciation, depletion and
amortization 1,185,788 1,075,490
----------- --------------
4,143,604 1,958,269
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Operating Income (Loss) (545,801) 122,707
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Other Income (Expense):
Interest, net 391,156 34,335
Other (104,279) (6,780)
Equity loss from investments in
unconsolidated subsidiaries (37,000) (13,000)
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Total Other Income (Expense) 249,877 14,555
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Net income (loss) before minority
interest (295,924) 137,262
Minority interest in income of
consolidated subsidiaries (30,157) (36,800)
----------- --------------
Net Income (Loss) and Comprehensive
Income (Loss) $ (326,081) $ 100,462
----------- --------------
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Weighted average number of common
shares outstanding 75,950,681 37,422,144
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Net Loss Per Common Share - Basic $ (0.00) $ 0.00
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Net Loss Per Common Share - Diluted $ (0.00) $ 0.00
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