SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) February 8, 2002
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CANARGO ENERGY CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-9147 91-0881481
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
CanArgo Services (UK) Limited
150 Buckingham Palace Road
London, England SW1W 9TR
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (44) 207 808 4700
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 9. REGULATION FD DISCLOSURE
On February 8, 2002, CanArgo Energy Corporation issued a press
release announcing termination of Ninotsminda Oil Company's Participation
Agreement with AES Mktvari LLC. The press release is presented below and
incorporated herein by reference.
[CANARGO ENERGY CORPORATION LOGO]
CANARGO ENERGY CORPORATION
FOR IMMEDIATE RELEASE IN EUROPE & NORTH AMERICA
CANARGO ANNOUNCES TERMINATION OF PARTICIPATION AGREEMENT
February 8th 2002 - Oslo, Norway, London, England - CanArgo Energy Corporation
("CanArgo") (OSE: CNR, OTCBB: GUSH) is pleased to announce that its wholly owned
subsidiary, Ninotsminda Oil Company (`NOC') has, by mutual agreement, agreed to
the termination of the Participation Agreement, which it signed with AES Mktvari
LLC in July 2000. The termination, which comes about as a result of AES's
intention to focus on its core activities, is expected to become effective in
the very near future once legal documentation has been concluded.
The Participation Agreement sets out the basis upon which AES was to contribute
to an exploration programme (which included wells N100 and M11) on NOC's
Ninotsminda licence in Georgia and earn a 50% interest in NOC's proceeds from
the sale of any petroleum discovered in the sub Middle Eocene stratigraphic
sequence as a result of the exploration programme (the `Interest'). At
termination, AES will have contributed $7,439,000 towards the exploration
programme.
Following termination of the Participation Agreement, AES will give up all
rights to the Interest and the Interest will revert back to NOC.
Furthermore, NOC has granted AES an option to enter into a gas supply agreement,
exercisable by 31 July 2002, on a take or pay basis. If the option is exercised
the gas supply agreement will be for an initial period of 5 years and it may be
extended thereafter by the parties on a twelve month rolling basis. In the event
that NOC produces gas from the sub Middle Eocene stratigraphic sequence, NOC
will pay an associated subsidiary of AES a rebate on gas sales until the
cumulative amount of that rebate equals the amount (on a non escalated basis)
which AES advanced towards the exploration programme.
The extensive testing programme of the potential discovery in NOC's exploration
well on the Ninotsminda licence area which the Company announced on 20th January
2002 is expected to commence imminently and the Company is expecting to make an
announcement on the preliminary results within 45 days. Termination of the
Participation Agreement is unconnected with the testing programme.
Dr David Robson, Chief Executive Officer of CanArgo said, "I'm pleased that our
relationship with AES has been clarified and I hope that it will continue
through the gas sales option in the future. As regards the forthcoming test on
well N100, it is clearly an important time for our Company. Initial indications
are encouraging although nothing will be resolved until the test programme is
completed. However, we are hopeful that our earlier estimates (which we
published on 14th March 2000) of up to one trillion cubic feet of gas will prove
accurate. If we are successful in achieving commercial production then we would
expect production to proceed in accordance with industry norms and our
Ninotsminda Production Sharing Contract."
CanArgo Energy Corporation is an independent oil and gas exploration and
production company operating in Eastern Europe. CanArgo's principal oil and gas
operations are located in the Republic of Georgia. The Company's activities at
its primary field in Georgia, the Ninotsminda field, are conducted through its
subsidiary, Ninotsminda Oil Company Limited. In addition, the Company has
interests in several other oil and gas prospects and in refining and marketing.
Further information on the Company is available at http://www.sec.gov.
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:
CANARGO ENERGY CORPORATION
MURRAY CHANCELLOR, CHIEF OPERATING OFFICER
TEL: +44 20 7808 4711
FAX +44 20 7808 4747
MOBILE: +44 77 4057 6138
E-MAIL: INFO@CANARGO.COM
NORWAY INVESTOR RELATIONS
ERIC CAMERON, GAMBIT
TEL: +47 22 04 82 00
FAX: +47 22 04 82 01
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CANARGO ENERGY CORPORATION
Date: February 11, 2002 By: /s/Anthony J Potter
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Anthony J. Potter
Corporate Secretary