Canargo Energy (CANRQ) 8-K Canargo Announces Tethys Offering

Exhibit 99.1

CanArgo Energy Corporation

FOR IMMEDIATE RELEASE IN EUROPE & NORTH AMERICA

CANARGO ANNOUNCES TETHYS OFFERING

June 21, 2007 — Guernsey, Channel Islands — CanArgo Energy Corporation (OSE: CNR, AMEX: CNR) (“CanArgo”) today announced that pursuant to an Agency agreement dated June 20 , 2007, its associated company, Tethys Petroleum Limited, a Guernsey Channel Islands company with oil and gas activities in Kazakhstan and Tajikistan (“Tethys”) has commenced a best efforts offering (“Offering”) of up to a maximum of approximately 18.2 million ordinary shares (“Primary Shares”) in Canada and certain other jurisdictions. CanArgo further announced that pursuant to the Agency Agreement, CanArgo Limited, a Guernsey Channel Islands company wholly owned by CanArgo will sell up to 8 million ordinary shares of Tethys currently held by CanArgo Limited (the “Secondary Shares” and together with the Primary Shares, the “Offered Shares”) in the Offering provided Tethys is successful in placing all the Primary Shares. Assuming the Offering is fully subscribed the aggregate net proceeds of the Offering are estimated to be approximately US$67 million (not including an overallotment option) and CanArgo will have disposed of its entire remaining holding of Tethys ordinary shares. The net proceeds received from the sale of the Primary Shares estimated at approximately US$46.5 million will be used by Tethys to fund oil and gas property acquisitions and exploration, development and operational costs, repayment of certain indebtedness as well as providing additional working capital. The net proceeds received from the sale of the Secondary Shares estimated at approximately US$20.5 million will be used by CanArgo to pay down existing indebtedness under its outstanding Senior Secured Notes due July 25, 2009 and to the extent of any excess net proceeds, its outstanding Senior Subordinated Convertible Guaranteed Notes due September 1, 2009.

The Offered Shares will only be offered in those jurisdictions where such securities may be lawfully offered for sale and therein only by persons permitted to sell such securities. No securities regulatory authority has expressed or will express an opinion about these securities and it is an offence to claim otherwise. The Offered Shares have not and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), or the securities laws of any state of the United States of America (the “United States”) and, subject to certain exceptions, may not be offered, sold or otherwise disposed of, directly or indirectly, within the United States or its territories or possessions except in transactions exempt from registration under the 1933 Act and under the securities laws of any applicable state. This announcement does not constitute an offer to sell or a solicitation of an offer to buy any of the Offered Shares within the United States, its territories or possessions.

CanArgo is an independent oil and gas exploration and production company with its principle oil and gas operations currently located in Georgia.

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 harbour 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 will be attained.

For more information please contact:

USA
Sabin Rossi, VP External Affairs and Investor Relations
CanArgo Energy Corporation
Tel : +1 617 669 1841
Fax : +1 617 973 6406
e-mail: sabin@canargo.com

NORWAY
Eric Cameron
Gambit H&K AS
Tel: +47 (22)048206