Exhibit 99(1)
[CanArgo Energy Corporation Letterhead]
FOR IMMEDIATE RELEASE IN NORTH AMERICA AND EUROPE
June 6, 2000 - CanArgo announces initiatives for Caspian region
Calgary, Alberta, Oslo, Norway - CanArgo Energy Corporation (OTCBB: GUSH,OSE:
CNR) announced today strategic initiatives, subject to successful financing,
to solidify its enviable position in the burgeoning Caspian region.
CanArgo's strategy is based on pursing low-cost, relatively low-risk
opportunities that complement its existing operations and more importantly,
offer substantial upside potential. Due in no small part to its excellent
reputation and government relations in the region, CanArgo has gained access
to opportunities that could see it become the major energy company in the
region. Some of these opportunities include :
Caspian Exploration Prospects - Following the discovery of a possible 20
billion barrel field offshore Kazakhstan in the Caspian Sea in mid May,
CanArgo renewed its involvement in the two offshore exploration blocks it won in
an international tender in February 1999. CanArgo anticipates participating
in a seismic program on these blocks to prove up drill-ready structures in
2000. Dr. David Robson, Chairman & Chief Executive Officer commented, "I have
no doubt that the Caspian will yield more giant fields. Based on the preliminary
work done on our offshore blocks, we have identified several large structures.
I remain very excited about the prospectivity of these blocks."
Attractive Exploration Prospects in the Republic of Georgia - CanArgo has
recently reached an understanding on seismic acquisition on the Norio Block.
CanArgo is presently negotiating a production sharing contract on this block,
which is expected to be finalized this year. Paddy Chesterman, Vice
President, Geology, reported "Based on our experience with Ninotsminda and our
regional geological work, the Norio Block has the potential to yield fields
analogous to the 180 million barrel Samgori field."
Investments in Downstream Activities - CanArgo intends to acquire a majority
equity interest in existing downstream operations, particularly refining
operations and a chain of gasoline stations. CanArgo was recently offered the
opportunity to take a controlling interest in the Georgian American Oil
Refinery by financing an expansion program that would include a reformer to
produce high octane gasoline. The only refinery in Georgia using Western
technology, it has been profitable since its inception. With the improved
product stream, the refinery would dominate the refined products market in
Georgia.
Michael Binnion, President and Chief Financial Officer commented, "The upside
potential of the refinery and the chain of gasoline stations does not
compare with the Caspian, the Norio Block and our Cretaceous drilling program
with AES. However, the internal rate of return and cash flow potential
from these projects are very impressive and will make solid contributions
to our bottom line results."
Dr. David Robson commented "There is a window open now on opportunities in the
Caspian region, but this will not stay open for long. CanArgo is well
positioned to seize this unusual market opportunity and build on the
achievements it has made to date. Although CanArgo does not require the
funds for existing operations, I feel confident that if we successfully conclude
our equity financing in the 500 million NOK range, we will be able
to deliver substantial value to our shareholders."
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.
For further information, contact:
Investor Relations:
North America
Tel: +403 777 1185
Toll Free 1-888-777-7974
Email: [email protected]
Web: www.canargo.com
Norway
Eric Cameron, Gambit
Tel: +47 22 04 82 00
Fax: +47 22 04 82 01
