CanArgo Energy Signs Contract for Manavi Appraisal Drilling

CanArgo Energy's wholly owned subsidiary, Ninotsminda Oil Company Limited, which holds CanArgo's interest in the Ninotsminda, Manavi and West Rustavi Production Sharing Contract, has signed a contract with Saipem to supply a drilling rig and services for the drilling of appraisal well Manavi 12 (M12) on the Manavi oil discovery in Georgia, with an option to drill further wells.

Saipem is a major international drilling service company owning 27 drilling rigs and 12 workover rigs capable of operating at depths ranging from 2,500 to 10,000 meters (8,200 to 32,800 feet) including in high temperatures and high pressure environments. It has drilled one of the world's deepest wells to date at 8,000 meters (26,250 feet). Its largest shareholder (43%) is ENI, the Italian-based international energy company, involved in oil and natural gas, electricity generation, engineering and construction sectors, and in the petrochemical business, from which it was originally spun-off in 1969.

Previously a contract had been signed with Great Wall Drilling Company of China but due to a delay in mobilizing the rig, a new agreement was concluded with Saipem who currently have a rig available.

Under the terms of the contract, Saipem will supply the Ideco E-2100 Az drilling rig complete with crew to drill the M12 appraisal well to a planned total depth of 5,000 meters (16,404 feet) in the Cretaceous. The contract includes an option to drill further wells. The rig and associated equipment will now be mobilized from Astrakhan in southern Russia to Georgia where it is expected to commence operations on the M12 well by the end of April / early May.

The M12 location is approximately 4 km to the west of the Manavi M11 Cretaceous oil discovery well, and located on seismic data acquired by CanArgo in 1998.