Canargo Announces Summary of Half-Year 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. , & LONDON--(BUSINESS WIRE)--Aug. 15, 2002CanArgo Energy Corporation (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : GUSH) (OSE OSE - Open Systems Environment : CNR See riser card. CNR - Communication and Network Riser ) ("CanArgo") today commented on its results and activities for the six months ended June June: see month. 30, 2002. Revenues for the period increased to $7.1 MM compared with $6.6 MM for the equivalent period last year. 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 for the period was $409,000 and the company recorded a net loss per share in the period of $0.01. Revenues increased primarily due to rig rental income Noun 1. rental income - income received from rental properties income - the financial gain (earned or unearned) accruing over a given period of time in the period. Revenue from CanArgo's retail business, CanArgo Standard Oil Products (CSOP CSOP Company Share Option Plan CSOP Combat Security Outpost CSOP Crew Systems Operating Procedures (NASA) CSOP Commission to Study the Organization of Peace CSOP Certified Securities Operation Professional ), also continues to grow, with further growth expected as the company expands. Overall 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 and marketing revenues, however, were lower in the first half of 2002 than in the corresponding period in 2001 due to the suspension in the fourth quarter of 2001 of refining operations in 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. . CanArgo has an active exploration programme underway in Georgia with several very attractive targets. Exploration well N100 is currently awaiting the delivery of the progressive cavity pump A progressive cavity pump is also known as a progressing cavity pump, eccentric screw pump or even just cavity pump and also, as is common in engineering generally, these pumps can often be referred to by using a manufacturers name, as if it were the generic (PCP PCP abbr. 1. phencyclidine 2. primary care physician Pneumocystis carinii pneumonia (PCP) ), which is scheduled for arrival in Georgia imminently. The PCP will allow the continuation of production testing of the recently discovered, under-pressured oil in the Lower Eocene interval. Norio exploration well MK72 is at 8,730 feet (2,661 metres), having recently been sidetracked due to the drill string becoming stuck. Recent drilling in the well encountered highly reactive reactive /re·ac·tive/ (re-ak´tiv) characterized by reaction; readily responsive to a stimulus. re·ac·tive adj. 1. Tending to be responsive or to react to a stimulus. 2. mudstones in the Miocene requiring high mud weights, thereby slowing drilling rates. MK72 is targeting a large structure in the Middle Eocene sequence. Manavi area exploration well M11 recently has been cased (178mm casing) at a depth of 13,720 feet (4,182m), having encountered the top of the Middle Eocene sequence. Drilling through the higher Oligocene and Upper Eocene intervals proved technically challenging with highly reactive and expansive mudstones requiring high mud weights. Prior to drilling ahead through the Middle Eocene and towards the target Cretaceous, a review of the drilling criteria and other data is being undertaken to ensure optimum drilling and technical parameters are utilised. Due to the decision by AES to cease funding exploration projects earlier in the year, a farm in partner will be sought to provide capital to finish the well. The prospect remains the same and the company is confident the funds will be found to finish the operation. The company's Georgian 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.). business continues to develop with 18 stations currently operating in Tbilisi, and with two more opening by year-end. The next stage of development will involve expansion outside of Tbilisi into the west part of Georgia, on the major transit route A sea route which crosses open waters normally joining two coastal routes. . The company remains the market leader in Tbilisi. A recent advertising campaign, the introduction of smart cards Example of widely used contactless smart cards are Hong Kong's Octopus card, Paris' Calypso/Navigo card and Lisbon' LisboaViva card, which predate the ISO/IEC 14443 standard. The following tables list smart cards used for public transportation and other electronic purse applications. , and the establishment of western-style facilities at the stations have increased sales steadily this year. Sales have steadily increased over the year and CSOP has won every corporate tender it had bid for this year. It now has over 350 corporate clients. CanArgo Energy Corporation 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, said "I am satisfied with our day-to-day operations from which we generated a small but positive cash flow from operations in the period. Nevertheless, we believe it prudent, where possible, to reduce costs and have developed a plan to do this without jeopardizing our core business activities. We are currently drilling three exploration wells in Georgia, with success from any one of these offering a huge potential upside Upside The potential dollar amount by which the market or a stock could rise. Notes: This is basically an educated guess on how high a stock could go in the near future. See also: Bull, Downside to the company. The Norio well alone could open up a whole new play in the area with large reserve upside. This is supported by a strong physical asset base that includes three of our own drilling rigs, and a 3MW generator generator, in electricity, machine used to change mechanical energy into electrical energy. It operates on the principle of electromagnetic induction, discovered (1831) by Michael Faraday. . We recently leased out one of our rigs with crew to another western oil company and generated a good profit margin from this. In addition to these projects we also have our retail business, CanArgo Standard Oil Products (CSOP). Although it is not our core business, CSOP has developed into the dominant retail chain in Tbilisi and the surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. area, the value of which we believe is not reflected in the current market capitalisation Noun 1. market capitalisation - an estimation of the value of a business that is obtained by multiplying the number of shares outstanding by the current price of a share market capitalization of the company. In Ukraine we are in negotiations with a partner that should provide the initial capital for the commencement of the incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. development programme at the Bugruvatiskve Field in Eastern Ukraine. This will provide a new core area for the company that should increase overall production with relatively little capital investment. Also in Ukraine our project in Stynawa continues to progress with the joint-venture company making significant repayments of loans to CanArgo. The company also retains an interest in two exciting blocks in the Caspian that offers good upside potential Upside potential The amount by which analysts or investors expect the price of a security may increase. upside potential The potential price or gain that may be expected in a security or in a security average, generally stated as the dollar in the future." A summary of the results released August 14th, 2002 is also attached. 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
Financial Statements
Consolidated Condensed Balance Sheets
Unaudited
--------------------------------------
June 30, December 31,
2002 2001
--------------- --------------------
ASSETS
-------
Cash and cash equivalents $ 3,068,524 $ 5,891,292
Accounts receivable 1,084,417 2,097,221
Inventory 323,180 583,849
Prepayments 402,239 2,235,712
Other current assets 734,748 733,211
--------------- --------------------
Total current assets $ 5,613,108 $11,541,285
Capital assets, net (including
unevaluated amounts of
$34,169,177 and $24,570,886,
respectively) 65,612,659 57,684,710
Investments in and advances to
oil and gas and otherventures
- net 810,339 1,085,922
--------------- --------------------
Total Assets $72,036,106 $70,311,917
=============== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Accounts payable $ 1,710,455 $ 1,069,419
Current portion of long term debt 620,223 392,408
Income taxes payable 82,660 90,456
Accrued liabilities 333,414 400,221
--------------- --------------------
Total current liabilities $ 2,746,752 $ 1,952,504
Long term debt 370,092 514,352
Provision for future site restoration 100,290 64,290
Minority shareholder advances 926,000 450,000
Minority interest in subsidiaries 1,617,499 1,531,191
Commitments and contingencies (Note 12)
Stockholders' equity:
Common stock, par value
$0.10 per share 9,735,620 9,200,845
Capital in excess of par value 145,151,475 144,057,517
Foreign currency translation
adjustment 51,257 -
Accumulated deficit (88,662,879) (87,458,782)
--------------- --------------------
Total stockholders' equity $66,275,473 $65,799,580
--------------- --------------------
Total Liabilities and
Stockholders' Equity $72,036,106 $70,311,917
============== ====================
CANARGO ENERGY CORPORATION AND SUBSIDIARIES
Financial Statements
Consolidated Condensed Statements of Operations
Unaudited Unaudited
Six Months Ended Three Months Ended
----------------- --------------------
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
-------------------- --------------------
Operating Revenues from
Continuing Operations:
Oil and gas sales $ 825,515 $ 869,711 $ 2,463,444 $ 2,617,906
Refining and
marketing 1,890,929 2,093,925 3,255,634 3,943,533
Other 154,648 - 1,398,153 -
--------------------- ---------------------
2,871,092 2,963,636 7,117,231 6,561,439
--------------------- ---------------------
Operating Expenses:
Field operating
expenses 283,385 611,260 879,361 1,113,477
Purchases of crude
oil and products 1,530,166 1,471,760 2,572,232 2,629,484
Refinery operating
expenses - 76,619 - 197,025
Direct project costs 352,263 321,625 981,702 571,205
Selling, general and
administrative 1,655,235 1,019,697 2,485,111 2,047,586
Depreciation,
depletion and
amortization 544,210 916,524 1,342,749 2,102,312
--------------------- ---------------------
4,365,259 4,417,485 8,261,155 8,661,089
--------------------- ---------------------
Operating Loss from
Continuing Operations (1,494,167) (1,453,849) (1,143,924) (2,099,650)
--------------------- ---------------------
Other Income (Expense):
Interest, net (45,645) 112,057 (93,331) 503,213
Other 127,443 20,949 38,930 16,670
Equity income from
investments 99,115 65,861 90,990 28,861
--------------------- ---------------------
Total Other Income
(Expense) 180,913 198,867 36,589 548,744
--------------------- ---------------------
Net Loss Before Income
Tax and Minority
Interest (1,313,254) (1,254,983) (1,107,335) (1,550,906)
Income taxes 26,848 - (10,454) -
Minority interest in
income of
consolidated
subsidiaries (4,733) 51,542 (86,308) 21,385
--------------------- ---------------------
Net Loss $(1,291,139)$(1,203,440)$(1,204,097)$(1,529,521)
===================== =====================
Other Comprehensive
Loss:
Foreign currency
translation (51,257) - (51,257) -
--------------------- ---------------------
Comprehensive Loss $(1,342,396)$(1,203,440)$(1,255,354)$(1,529,521)
===================== =====================
Weighted average
number of common
shares outstanding 97,268,403 75,950,681 96,034,612 75,950,681
--------------------- ---------------------
Net Loss Per Common
Share - Basic $ (0.01)$ (0.02)$ (0.01)$ (0.02)
--------------------- ---------------------
Net Loss Per Common
Share - Diluted $ (0.01)$ (0.02)$ (0.01)$ (0.02)
--------------------- ---------------------
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