CanArgo Sells Stake in Boryslaw Oil Company

CanArgo Energy has agreed to sell its stake in Boryslaw Oil Company, the joint venture in west Ukraine currently operating the Stynawske oilfield.

CanArgo will sell its interest in Fountain Oil Boryslaw, its wholly owned subsidiary which holds CanArgo's 45% interest in BOC, to a local Ukrainian company for US$1,000,000. This sum will be paid in installments with title only being transferred upon payment in full. The buyer has also acknowledged BOC's debts to CanArgo, currently US$160,000, which are in the process of being repaid.

Dr David Robson, Chairman and Chief Executive Officer of CanArgo commented, "This disposal will yield further capital for our prime focus which is the development of our Georgian production base. Although Stynawske is producing oil and gas at present, significant further investment is required to develop the field and to meet license commitments. We would prefer to focus our capital on the development of the Ninotsminda field in Georgia where we have proved that horizontal drilling is effective, and where we have a much better contractual and business environment in which to operate."