CanArgo Prices Global Public Offering

CanArgo Energy reports that its Registration Statement on Form S-3 in relation to its global public offering was declared effective by the United States Securities and Exchange Commission on September 17, 2004.

In addition, CanArgo announced hat it has priced its Global Offering of 75 million shares at $0.50 per share (approximately NOK 3.46 per share). This corresponds to an average closing price per share of approximately $0.53 (approximately NOK 3.67) on the American and Oslo Stock Exchanges during the month up to September 17, 2004.

The Global Offering was significantly oversubscribed and as such CanArgo and its Placement Agents have applied the allocation criteria set out in the US Prospectus and the International Prospectus relating to the sale of these securities, with the overriding objective of creating a long-term shareholder structure for CanArgo, as well as considering early application in the issue.

Net proceeds from the Global Offering will be used primarily for capital and operational expenditures in Georgia on the Ninotsminda/Samgori horizontal development program and appraisal of the Manavi oil discovery as well as to repay short-term credit facilities.

A copy of the final US Prospectus relating to the sale of these securities may be obtained from ABG Sundal Collier Inc., 535 Madison Avenue, 17th Floor, New York, New York 10022. A copy of the final International Prospectus may be obtained from ABG Sundal Collier Norge ASA, P.O. Box 1444, 0115 Oslo, Norway.