<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND (d) AND AMENDMENTS THERETO FILED
PURSUANT TO RULE 13d-2(a)
(AMENDMENT NO. 2)(1)
CANARGO ENERGY CORPORATION
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(Name of Issuer)
COMMON STOCK, PAR VALUE $0.10 PER SHARE
- --------------------------------------------------------------------------------
(Title of Class of Securities)
137225 10 8
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(CUSIP Number)
J.F. RUSSELL HAMMOND
PROVINCIAL SECURITIES LTD.
607 GILBERT HOUSE, BARBICAN, LONDON EC2Y 8BD ENGLAND
44-171-628-6184
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
AUGUST 6, 1999
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
Page 1 of 18 Pages
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(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
<PAGE> 2
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CUSIP NO. 137225 10 8 13D PAGE 2 OF 18 PAGES
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- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
PROVINCIAL SECURITIES LTD.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
LIBERIA
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,671,250
BENEFICIALLY ------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING ------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
1,671,250
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,671,250
- --------------------------------------------------------------------------------
12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
5.2%
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14 TYPE OF REPORTING PERSON*
CO
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<PAGE> 3
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CUSIP NO. 137225 10 8 13D PAGE 3 OF 18 PAGES
- ------------------------------- ---------------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
J.F. RUSSELL HAMMOND
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF, OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED KINGDOM
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NUMBER OF 7 SOLE VOTING POWER
SHARES 43,750
BENEFICIALLY ------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 5,613,476
REPORTING ------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
43,750
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,613,476
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,657,226
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12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
17.5%
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14 TYPE OF REPORTING PERSON*
IN, IA
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<PAGE> 4
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CUSIP NO. 137225 10 8 13D PAGE 4 OF 18 PAGES
- ------------------------------- ---------------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
IAN ILSLEY
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED KINGDOM
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 1,671,250
REPORTING ------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,671,250
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,671,250
- --------------------------------------------------------------------------------
12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
5.2%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE> 5
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CUSIP NO. 137225 10 8 13D PAGE 5 OF 18 PAGES
- ------------------------------- ---------------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
TERRENEX ACQUISITION CORPORATION
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
ALBERTA, CANADA
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NUMBER OF 7 SOLE VOTING POWER
SHARES 3,942,226
BENEFICIALLY ------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING ------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
3,942,226
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,942,226
- --------------------------------------------------------------------------------
12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
12.2%
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14 TYPE OF REPORTING PERSON*
IV
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<PAGE> 6
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CUSIP NO. 137225 10 8 13D PAGE 6 OF 18 PAGES
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- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
MICHAEL R. BINNION
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF, OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
CANADA
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NUMBER OF 7 SOLE VOTING POWER
SHARES 561,633
BENEFICIALLY ------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 3,947,226
REPORTING ------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
561,633
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,947,226
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,508,859
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12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
13.9%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE> 7
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CUSIP NO. 137225 10 8 13D PAGE 7 OF 18 PAGES
- ------------------------------- ---------------------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
SIMON BATCUP
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
CANADA
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 3,942,226
REPORTING ------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,942,226
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,942,226
- --------------------------------------------------------------------------------
12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
12.2%
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14 TYPE OF REPORTING PERSON*
IN
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<PAGE> 8
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CUSIP NO. 137225 10 8 13D PAGE 8 OF 18 PAGES
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
LESLIE R BEDDOES JR
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
CANADA AND USA
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NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 3,942,226
REPORTING ------------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
3,942,226
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,942,226
- --------------------------------------------------------------------------------
12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
12.2%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
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<PAGE> 9
Page 9 of 18
ITEM 1. SECURITY AND ISSUER.
The title of the class of equity securities to which this
statement relates is common stock, par value $.10 per share (the "Common
Stock"), issued by CanArgo Energy Corporation, a Delaware corporation
("CanArgo"). The principal offices of CanArgo are located at Suite 1580, 727
Seventh Avenue S.W., Calgary, Alberta, Canada T2P 0Z5.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed by Provincial Securities Ltd., a Liberia
corporation ("Provincial"), J.F. Russell Hammond ("JFRH"), Ian Ilsley, Terrenex
Acquisition Corporation, an Alberta corporation ("Terrenex"), Michael R. Binnion
("MRB"), Simon Batcup ("SB") and Leslie R. Beddoes, Jr. ("LRB").
Provincial's principal business is as a private investment
company. Provincial's principal business and principal office address is 57 Rue
Grimaldi, Monte Carlo MC 98000 Monaco. Provincial owns approximately 19% of the
outstanding shares of Terrenex.
JFRH is a Director of CanArgo, an investment adviser to
Provincial and Chairman of Terrenex. The activities associated with these
positions constitute the principal occupation of JFRH. JFRH is a citizen of the
United Kingdom, and his principal business address is 607 Gilbert House,
Barbican, London EC2Y 8BD, England.
Ian Ilsley is the sole director of Provincial and managing
director of B.A.S.E. SAM, a financial management and advisory company in Monaco.
The activities associated with these positions constitute the principal
occupation of Ian Ilsley. Ian Ilsley is a citizen of United Kingdom, and his
principal business address is Provincial's business address listed above.
Terrenex's principal business is as an Alberta Stock Exchange
listed investment company. Terrenex's principal business and principal office
address is Suite 1580, 727 Seventh Avenue S.W., Calgary, Alberta, Canada T2P
0Z5.
MRB is President, Director and Chief Financial Officer of
CanArgo. The activities associated with these positions constitute the principal
occupation and employment of MRB. MRB is also President, Director, Chief
Financial Officer and holder of approximately 7% of the outstanding shares of
Terrenex and the sole director and beneficial owner of Ruperts Crossing, an
Alberta corporation ("Ruperts"), whose principal business is as a private
investment company. MRB is a citizen of Canada, and his principal business
address is CanArgo's business address listed above.
SB and LRB became directors of Terrenex on January 11, 1999 and
July 23, 1999, respectively. SB is Vice President of FinTech Services Limited
and LRB is an international petroleum consultant. These positions constitute the
principal occupation and employment of these individuals, respectively. SB is a
citizen of Canada and his principal business address is Suite 900, 703 - 6th
Avenue S.W., Calgary, Alberta, Canada T2P 0T9. LRB is a citizen of both Canada
and the United States and his principal business address is 2946 Tudor Avenue,
Victoria, British Columbia, Canada V8N 1M1.
<PAGE> 10
Page 10 of 18
Gerold Fong is Vice President, Exploration of Terrenex and an
independent geophysical consultant. These positions constitute the principal
occupation and employment of Gerold Fong. Gerold Fong is a citizen of Canada and
his principal business address is 199 Edgebrook Circle NW, Calgary, Alberta,
Canada T3A 5A3.
During the last five years, none of Provincial, JFRH, Ian Ilsley,
Terrenex, MRB, SB, LRB and Gerold Fong has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors), and during
such period none has been party to a civil proceeding of a judicial or
administrative body of competent jurisdiction, the result of which was to
subject the person to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCES AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On July 15, 1998, CanArgo completed the acquisition of all of the
common stock of CanArgo Oil & Gas Inc. ("CAOG") for consideration payable in
Common Stock. On completion of the acquisition, CAOG became a subsidiary of
CanArgo, and each previously outstanding share of CAOG common stock was
converted into 0.8 Exchangeable Shares of CAOG. The Exchangeable Shares are
exchangeable generally at the option of the holders for Common Stock of CanArgo
on a share-for-share basis and entitle the holders to dividends and other rights
economically equivalent to those to which holders of Common Stock of CanArgo are
entitled.
This Schedule 13D was originally filed to report the beneficial
ownership of the Reporting Persons as a result of the acquisition. The following
table lists Provincial, Terrenex, Ruperts and MRB's holdings in CAOG
Exchangeable Shares at July 15, 1998:
<TABLE>
<CAPTION>
-----------------------------------------------------------------
HOLDER EXCHANGEABLE SOURCE
SHARES (1)
-----------------------------------------------------------------
<S> <C> <C>
Provincial 1,671,250 Working Capital
-----------------------------------------------------------------
Terrenex 1,820,031 Working Capital
-----------------------------------------------------------------
Ruperts 194,842 Working Capital
-----------------------------------------------------------------
MRB 13,792 Personal Funds
-----------------------------------------------------------------
</TABLE>
(1) Exchangeable Shares held which may be exchanged for shares of Common Stock
of CanArgo on a share-for-share basis.
CAOG Special Warrants were issued to investors on October 30,
1997 in a private placement under the CAOG Special Warrant Indenture. Each CAOG
Special Warrant was exercisable without payment of any additional consideration
for one unit consisting of 1.1 CAOG common shares and 0.55 CAOG Stock Purchase
Warrants. All of the CAOG Special Warrants which had not been exercised on or
before April 30, 1999 were automatically exercised on that date. Terrenex held
574,200 CAOG Special Warrants at July 15, 1998 which were exercisable for
459,360 Exchangeable Shares and 229,680 CAOG Stock Purchase Warrants exercisable
at an exercise price of CDN $3.25 through November 1, 1999 (Series A). The CAOG
Special Warrants were acquired by Terrenex in 1997 utilizing its working capital
for CDN $2.20 per CAOG Special Warrant.
<PAGE> 11
Page 11 of 18
Holders of CAOG Stock Purchase Warrants also have the right to
purchase 0.8 Exchangeable Shares for each CAOG Stock Purchase Warrant held.
Terrenex held 40,000 CAOG Stock Purchase Warrants at July 15, 1998 which were
exercisable for 32,000 Exchangeable Shares at an exercise price of CDN $2.875
per Exchangeable Share through July 31, 1999 (Series B). These CAOG Stock
Purchase Warrants (Series B) expired unexercised.
At the date of the acquisition, CAOG had a stock option plan that
was later adopted by CanArgo. On July 15, 1998, each existing option granted
under CAOG's stock option plan was converted into the right to purchase 0.8
shares of Common Stock at an exercise price of US $1.85 per share through July
1, 2002, according to a three-year vesting schedule under which 1/12th of the
optioned shares vested at the end of each 3-month period beginning six months
from the date of grant. JFRH and MRB held options under the CAOG plan to
purchase 60,000 shares and 140,000 shares of CanArgo's Common Stock,
respectively, at July 15, 1998, of which 15,000 and 35,000, respectively, were
exercisable at July 15, 1998. Of these options held by JFRH and MRB, 40,000 and
93,333, respectively, are exercisable within sixty days of the date of this
amendment to Schedule 13D. To the extent JFRH and MRB exercise these options,
both presently intend to utilize personal funds.
At July 15, 1998, JFRH was granted an option to purchase 3,750
shares of Common Stock of CanArgo at an exercise price of US $1.00 per share
through July 14, 2001 that became 100% vested at January 16, 1999. The option
was granted to JFRH under CanArgo's 1995 Long-Term Incentive Plan. To the extent
JFRH exercises the option, he intends to utilize personal funds.
The following transaction by Provincial was effected since the
date of the original filing of this Schedule 13D:
1. On January 19, 1999, Provincial exchanged 1,671,250
Exchangeable Shares on a share-for-share basis for 1,671,250
shares of Common Stock for no consideration.
The following transactions by JFRH were effected since the date
of the original filing of this Schedule 13D:
1. On June 16, 1999, JFRH was granted stock options to acquire
3,750 shares of Common Stock at an exercise price of US $0.31 per
share through June 15, 2002; these options are not exercisable
within the next 60 days.
2. On July 21, 1999, JFRH was granted stock options to acquire
7,500 shares of Common Stock at an exercise price of US $0.275
per share through July 20, 2004, the exercise of which is
conditioned upon stockholder approval, at the next stockholders
meeting, of an amendment to the 1995 Long-Term Incentive Plan to
permit outside directors to participate generally in such plan.
<PAGE> 12
Page 12 of 18
The following transactions by Terrenex were effected since the
date of the original filing of this Schedule 13D:
1. On November 30, 1998, Terrenex (i) acquired 88,000
Exchangeable Shares and 44,000 CAOG Stock Purchase Warrants
entitling Terrenex to purchase 44,000 Exchangeable Shares at an
exercise price of CDN $3.25 per Exchangeable Share through
November 1, 1999 through the exercise of 110,000 CAOG Special
Warrants for no consideration and (ii) exchanged 1,908,031
Exchangeable Shares on a share-for-share basis for 1,908,031
shares of Common Stock for no consideration.
2. On April 30, 1999, Terrenex acquired 371,360 Exchangeable
Shares and 185,680 CAOG Stock Purchase Warrants entitling it to
purchase 185,680 Exchangeable Shares at an exercise price of CDN
$3.25 per Exchangeable Share through November 1, 1999 upon the
automatic exercise of 464,200 CAOG Special Warrants for no
consideration.
3. On May 17, 1999, Terrenex exchanged 371,360 Exchangeable
Shares on a share-for-share basis for 371,360 shares of Common
Stock for no consideration.
4. On July 31, 1999, 40,000 CAOG Stock Purchase Warrants
entitling Terrenex to purchase 32,000 Exchangeable Shares at an
exercise price of CDN $2.875 per Exchangeable Share through July
31, 1999 expired without exercise.
5. On August 6, 1999, Terrenex purchased 1,433,155 shares of
Common Stock in CanArgo's public offering at a price of $0.30 per
share utilizing its working capital.
The following transactions by MRB and Ruperts were effected since
the date of the original filing of this Schedule 13D:
1. On July 17, 1998, MRB was granted stock options to acquire
170,000 shares of Common Stock at an exercise price of US $1.25
per share through July 16, 2008; options to acquire 56,666 of
these shares are exercisable within the next 60 days.
2. On October 7, 1998, MRB was granted stock options to acquire
72,000 shares of Common Stock at an exercise price of US $0.688
per share through October 6, 2008; options to acquire 24,000 of
these shares are exercisable within the next 60 days.
3. On November 23, 1998, MRB purchased 5,000 shares of Common
Stock in the open market at $0.52 per share utilizing personal
funds.
4. On December 9, 1998, MRB purchased 5,000 and 14,000 shares of
Common Stock in the open market at $0.375 and $0.25 per share,
respectively, utilizing personal funds.
<PAGE> 13
Page 13 of 18
5. On February 3, 1999, Ruperts exchanged 194,842 Exchangeable
Shares on a share-for-share basis for 194,842 shares of Common
Stock for no consideration.
6. On April 1, 1999, MRB exchanged 13,792 Exchangeable Shares on
a share-for-share basis for 13,792 shares of Common Stock for no
consideration.
7. On July 21, 1999, MRB was granted stock options to acquire
18,000 shares of Common Stock at an exercise price of US $0.275
per share through July 20, 2004; these options are not
exercisable within the next 60 days.
8. On July 21, 1999, MRB purchased 5,000 shares of Common Stock
in the open market at $0.30 per share utilizing personal funds.
9. On August 5, 1999, MRB purchased 5,000 shares of Common Stock
in the open market at $0.29 per share for the account of his
minor daughter utilizing personal funds.
10. On August 6, 1999, MRB purchased 150,000 shares of Common
Stock in CanArgo's public offering at a price of $0.30 per share
utilizing personal funds.
ITEM 4. PURPOSE OF TRANSACTION.
Provincial, JFRH, Terrenex, MRB and Ruperts acquired their
beneficial ownership of shares of Common Stock of CanArgo with the intention to
hold such securities for investment purposes. To the extent JFRH, Terrenex and
MRB acquire shares of Common Stock of CanArgo by exercise of CAOG Stock Purchase
Warrants or stock options, each of JFRH, Terrenex and MRB intend to hold such
securities or investment purposes.
Provincial, JFRH, Terrenex and MRB may also acquire additional
shares of Common Stock for investment purposes from time to time, although they
do not have any present plans to do so.
Provincial, JFRH, Ian Ilsley, Terrenex, MRB, Ruperts, SB and LRB currently have
no plans for proposals which relate to or would result in: the acquisition or
disposition by any person of additional securities of the issuer; any
extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving CanArgo or any subsidiary of CanArgo; the sale or transfer
of a material amount of assets of CanArgo or any of its subsidiaries; any change
in CanArgo's present Board of Directors or management, including any plans or
proposal to change the number or term of directors or to fill any existing
vacancies on the board; any material change in CanArgo's capitalization (other
than a reverse stock split approved by CanArgo's stockholders and subject to
implementation by its Board of Directors), or dividend policy or in CanArgo's
business or corporate structure; any changes in CanArgo's charter, bylaws, or
instruments corresponding thereto or other actions which may impede the
acquisition of control of CanArgo by any person; causing a class of securities
of CanArgo being delisted
<PAGE> 14
Page 14 of 18
from a national securities exchange or ceasing to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association; a class of equity securities of CanArgo becoming eligible for
termination of registration pursuant to Section 12 (g) (4) of the Securities
Exchange Act of 1934, as amended; or any similar action.
ITEM 5. INTEREST IN THE SECURITIES OF THE ISSUER.
Provincial holds 1,671,250 shares of Common Stock of CanArgo
which represent 5.2% of the shares of Common Stock issued and outstanding, based
on the 32,103,296 outstanding shares reported in CanArgo's most recent quarterly
report on Form 10-Q. Provincial has the sole power to direct the vote or
disposition for the 1,671,250 shares of Common Stock. Provincial would exercise
its power to direct the vote or disposition of such securities through its sole
director, Ian Ilsley, in accordance of the advice of its investment adviser,
JFRH.
JFRH has beneficial ownership of 5,657,226 shares of Common Stock
of CanArgo which represent 17.5% of the shares of Common Stock issued and
outstanding, based on the 32,103,296 outstanding shares reported in CanArgo's
most recent quarterly report on Form 10-Q. JFRH would expect to have the sole
power to direct the vote or disposition of any shares of Common Stock of CanArgo
acquired by him pursuant to the exercise of the 43,750 options owned by him that
are exercisable within the next 60 days. As an investment advisor to Provincial,
JFRH shares with Ian Ilsley the power to direct the vote or disposition for
1,671,250 shares of Common Stock of CanArgo owned by Provincial. As a director
of Terrenex, JFRH shares with MRB, SB and LRB the power to direct the vote or
disposition for an aggregate of 3,942,226 shares of Common Stock of CanArgo
owned by Terrenex or which could be acquired by Terrenex within the next 60
days. The following transactions by JFRH were effected during the past 60 days:
1. On June 16, 1999, JFRH was granted stock options to acquire
3,750 shares of Common Stock at an exercise price of US $0.31 per
share through June 15, 2002; these options are not exercisable
within the next 60 days.
2. On July 21, 1999, JFRH was granted stock options to acquire
7,500 shares of Common Stock at an exercise price of US $0.275
per share through July 20, 2004, the exercise of which is
conditioned upon stockholder approval, at the next stockholders
meeting, of an amendment to the 1995 Long-Term Incentive Plan to
permit outside directors to participate generally in such plan.
Ian Ilsley has beneficial ownership of 1,671,250 shares of Common
Stock of CanArgo which represent 5.2% of the shares of Common Stock issued and
outstanding, based on the 32,103,296 outstanding shares reported in CanArgo's
most recent quarterly report on Form 10-Q. As the sole director of Provincial,
Ian Ilsley shares with JFRH the power to direct the vote or disposition for
1,671,250 shares of Common Stock of CanArgo owned by Provincial.
Terrenex has beneficial ownership of 3,942,226 shares of Common Stock of CanArgo
which represent 12.2% of the shares of Common Stock issued and outstanding,
based on the 32,103,296 outstanding shares reported in CanArgo's most recent
quarterly report on Form 10-Q. Terrenex has the sole power to direct the vote or
disposition for 3,712,546 shares of
<PAGE> 15
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Common Stock owned by Terrenex. Terrenex would expect to have the
sole power to direct the vote or disposition of any shares of Common Stock
acquired by Terrenex pursuant to the CAOG Stock Purchase Warrants. Pursuant to
the CAOG Stock Purchase Warrants, Terrenex has the right to purchase 229,680
shares of Common Stock of CanArgo. Terrenex would exercise its power to direct
the vote or disposition of such securities through its Board of Directors. The
following transactions by Terrenex were effected during the past 60 days:
1. On July 31, 1999, 40,000 CAOG Stock Purchase Warrants
entitling Terrenex to purchase 32,000 Exchangeable Shares at an
exercise price of CDN $2.875 per Exchangeable Share through July
31, 1999 expired without exercise.
2. On August 6, 1999, Terrenex purchased 1,433,155 shares of
Common Stock in CanArgo's public offering at a price of $0.30 per
share utilizing its working capital.
MRB has beneficial ownership of 4,508,859 shares of Common Stock
of CanArgo which represent 13.9% of the shares of Common Stock issued and
outstanding, based on the 32,103,296 outstanding shares reported in CanArgo's
most recent quarterly report on Form 10-Q. MRB has the sole power to direct the
vote or disposition for 192,792 shares of Common Stock owned by him. MRB would
expect to have the sole power to direct the vote or disposition of any shares of
Common Stock acquired by him pursuant to the exercise of the 173,999 options
owned by him that are exercisable within the next 60 days. As the sole director
of Ruperts, MRB has the sole power to direct the vote or disposition for 194,842
shares of Common Stock of CanArgo owned by Ruperts. MRB shares power with his
spouse to direct the vote or disposition for 5,000 shares of Common Stock owned
by his minor daughter. As a director of Terrenex, MRB shares with JFRH, SB and
LRB the power to direct the vote or disposition for an aggregate of 3,942,226
shares of Common Stock owned by Terrenex or which could be acquired by Terrenex
within the next 60 days. The following transactions by MRB were effected during
the past 60 days:
1. On July 21, 1999, MRB was granted stock options to acquire
18,000 shares of Common Stock at an exercise price of US $0.275
per share through July 20, 2004; these options are not
exercisable within the next 60 days.
2. On July 21, 1999, MRB purchased 5,000 shares of Common Stock
in the open market at $0.30 per share utilizing personal funds.
3. On August 5, 1999, MRB purchased 5,000 shares of Common Stock
in the open market at $0.29 per share for the account of his
minor daughter utilizing personal funds.
4. On August 6, 1999, MRB purchased 150,000 shares of Common
Stock in CanArgo's public offering at a price of $0.30 per share
utilizing personal funds.
SB has beneficial ownership of 3,942,226 shares of Common Stock
of CanArgo which represent 12.2% of the shares of Common Stock issued and
outstanding, based on the
<PAGE> 16
Page 16 of 18
32,103,296 outstanding shares reported in CanArgo's most recent quarterly report
on Form 10-Q. As a director of Terrenex, SB shares with JFRH, MRB and LRB the
power to direct the vote or disposition for an aggregate of 3,942,226 shares of
Common Stock of CanArgo owned by Terrenex or which could be acquired by Terrenex
within the next 60 days.
LRB has beneficial ownership of 3,942,226 shares of Common Stock
of CanArgo which represent 12.2% of the shares of Common Stock issued and
outstanding, based on the 32,103,296 outstanding shares reported in CanArgo's
most recent quarterly report on Form 10-Q. As a director of Terrenex, LRB shares
with JFRH, MRB and SB the power to direct the vote or disposition for an
aggregate of 3,942,226 shares of Common Stock of CanArgo owned by Terrenex or
which could be acquired by Terrenex within the next 60 days.
The 6,223,859 shares of Common Stock of CanArgo that Provincial,
JFRH, Ian Ilsley, Terrenex, MRB, Ruperts, SB and LRB in the aggregate own or
which could be acquired within the next 60 days represent 19.1% of the shares of
Common Stock issued and outstanding, based on the 32,103,296 outstanding shares
reported in CanArgo's most recent quarterly report on Form 10-Q.
Provincial disclaims any beneficial interest in any share of
Common Stock owned by Terrenex, MRB and Ruperts or which JFRH, Terrenex and MRB
have the right to acquire, other than such beneficial interest that arises out
of Provincial's equity interest in Terrenex. JFRH disclaims any beneficial
interest in any share of Common Stock owned by Provincial, Terrenex, MRB and
Ruperts or which Terrenex and MRB have the right to acquire, other than such
beneficial interest that arises out of JFRH's service as investment adviser to
Provincial and director of Terrenex. Ian Ilsley disclaims any beneficial
interest in any share of Common Stock owned by Provincial, Terrenex, MRB and
Ruperts or which JFRH, Terrenex and MRB have the right to acquire, other than
such beneficial interest that arises out of Ian Ilsley's service as sole
director of Provincial. Terrenex disclaims any beneficial interest in any share
of Common Stock owned by Provincial, MRB and Ruperts or which JFRH and MRB have
the right to acquire. MRB disclaims any beneficial interest in any share of
Common Stock owned by Provincial, Terrenex and Ruperts or which JFRH and
Terrenex have the right to acquire, other than such beneficial interest that
arises out of MRB's service as a director and officer of Terrenex and Ruperts,
and MRB's equity interest in Terrenex. SB and LRB disclaim any beneficial
interest in any share of Common Stock owned by Provincial, Terrenex, MRB and
Ruperts or which JFRH, Terrenex and MRB have the right to acquire, other than
such beneficial interest that arises out of SB and LRB's service as directors of
Terrenex.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Except pursuant to the terms of the CAOG Stock Purchase Warrants
and the stock options, there are no contracts, arrangements, understandings or
relationships between the parties named in Item 2 above and between such persons
and any person with respect to any securities of the Corporation.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A - Amended Joint Filing Agreement pursuant to Rule
13d-1(k)(l).
<PAGE> 17
Page 17 of 18
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: August 31, 1999
PROVINCIAL SECURITIES LTD.
By: /s/ Ian Ilsley
------------------------------------
Ian Ilsley, Director
/s/ J.F. Russell Hammond
----------------------------------------
J.F. Russell Hammond
/s/ Ian Ilsley
----------------------------------------
Ian Ilsley
TERRENEX ACQUISITION CORPORATION
By: /s/ Michael R. Binnion
-------------------------------------
Michael R. Binnion, President
/s/ Michael R. Binnion
----------------------------------------
Michael R. Binnion
/s/ Simon Batcup
----------------------------------------
Simon Batcup
/s/ Leslie R. Beddoes,Jr.
----------------------------------------
Leslie R. Beddoes, Jr.
<PAGE> 1
Page 18 of 18
Exhibit "A"
Amended Joint Filing Agreement
Provincial Securities Ltd., J.F. Russell Hammond, Ian Ilsley, Terrenex
Acquisition Corporation, Michael R. Binnion, Simon Batcup and Leslie R. Beddoes,
Jr. (collectively the "Parties" and individually a "Party") hereby agree that
they shall file a single statement on Schedule 13D (as amended from time to
time, the "Statement") with respect to their beneficial ownership of shares of
Common Stock (the "Securities") of CanArgo Energy Corporation, a Delaware
corporation, on behalf of and in satisfaction of the obligations of all the
Parties and that they shall amend the Statement from time to time as required by
rules promulgated under the Securities Exchange Act of 1934, as amended.
Each of the Parties represents and warrants that such Party is eligible to use
Schedule 13D with respect to the information regarding the Securities and agrees
to assume responsibility for the timely filing of the Statement and any
amendments thereto. Each of the Parties hereby assumes responsibility for the
completeness and accuracy of the information concerning such Party contained in
the Statement. No Party shall be responsible for the completeness and accuracy
of the information contained in the statement concerning the other Parties,
unless such Party knows or has reason to believe that such information is
incomplete or inaccurate. The execution of the Statement, including any
amendment thereto, by one of the Parties shall constitute a representation by
such Party that the information concerning such Party contained therein is
complete and accurate and that such Party neither knows nor has any reason to
believe that the information concerning the other Parties contained therein is
either incomplete or inaccurate.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but which together shall constitute one and the same
instrument.
In Witness Whereof, the Parties have executed this Joint Filing Agreement this
31st day of August, 1999.
PROVINCIAL SECURITIES LTD. /s/ J.F. Russell Hammond
-----------------------------------
J.F. Russell Hammond
By: /s/ Ian Ilsley
--------------------------------
Ian Ilsley /s/ Ian Ilsley
-----------------------------------
Ian Ilsley
TERRENEX ACQUISITION CORPORATION
/s/ Simon Batcup
By: /s/ Michael R. Binnion -----------------------------------
-------------------------------- Simon Batcup
Michael R. Binnion, President
/s/ Leslie R. Beddoes, Jr.
-----------------------------------
/s/ Michael R. Binnion Leslie R. Beddoes, Jr.
- -----------------------------------
Michael R. Binnion
