CanArgo Energy Begins 15-Well Development Program in Georgia

CanArgo Energy has commenced drilling on the N22H horizontal well on the Ninotsminda Field as scheduled.

The N22H well is the first well in a planned 15-well development program on the Ninotsminda and Samgori Fields in Georgia. The horizontal sections are to be drilled under-balanced by Weatherford International using Under Balanced Coil Tubing Drilling (UBCTD) technology. The horizontal sections are being drilled from existing well bores which are being prepared by our own operating company and should take approximately two weeks to drill each horizontal section. It is believed that under-balanced horizontal drilling will yield better productivity and improved recovery rates from these fields. On completion of the N22H well, the equipment will move to the next well in the program, the N100H2 well, also on the Ninotsminda Field.

On the appraisal of the Manavi oil discovery, operations are progressing on the M11Z sidetrack well. This is currently being drilled conventionally by CanArgo's own crew down to the top of the reservoir sequence at approximately 4,200 meters (13,780 feet) where casing will be run. At that point, Weatherford will take over with the UBCTD equipment and drill through the Middle Eocene into the Cretaceous sequence whereupon a full test of the new oil discovery is planned.