CanArgo Energy Corporation: Q1 Results

GUERNSEY, BRITISH ISLES -- (MARKET WIRE) -- 05/12/08 -- CanArgo Energy Corporation ("CanArgo" or the "Company") (AMEX: CNR) (OSLO: CNR):

CANARGO ENERGY CORPORATION AND SUBSIDIARIES

Selected Financial Information Consolidated Condensed Statements of Operations Expressed in United States dollars

Unaudited ------------------------------ Three Months Ended March 31, March 31, 2008 2007 ------------------------------ (Expressed in United States dollars)

Operating Revenues from Continuing Operations: Oil and gas sales $ 2,590,762 $ 446,847 ------------------------------ 2,590,762 446,847 ------------------------------Operating Expenses: Field operating expenses 364,936 230,551 Direct project costs 249,973 176,646 Selling, general and administrative 1,456,595 1,728,802 Depreciation, depletion and amortization 747,259 265,711 ------------------------------ 2,818,763 2,401,710 ------------------------------ Operating Loss from Continuing Operations (228,001) (1,954,863) ------------------------------ Other Income (Expense): Interest income 28,814 109,887 Interest and amortization of debt discount and expense (859,484) (2,227,994) Foreign exchange gains (losses) (90,004) (19,917) Other (36,412) 1,485 ------------------------------Total Other Expense (957,086) (2,136,539) ------------------------------ Loss from Continuing Operations Before Taxes (1,185,087) (4,091,402)

Income taxes - - ------------------------------ Loss from Continuing Operations (1,185,087) (4,091,402)

Net Loss from Discontinued Operations, net of taxes and minority interest (19,794) (1,840,401) ------------------------------ Net Loss $ (1,204,881) $ (5,931,803) ------------------------------ ------------------------------ Weighted average number of common shares outstanding - Basic 242,120,974 238,100,918 ------------------------------ - Diluted 242,120,974 238,100,918 ------------------------------ Basic and Diluted Net Income (Loss) Per Common Share - from continuing operations $ (0.00) $ (0.02) - from discontinued operations $ (0.00) $ (0.01) ------------------------------ Basic and Diluted Net Income (Loss) Per Common Share $ (0.00) $ (0.03) ------------------------------ CANARGO ENERGY CORPORATION AND SUBSIDIARIES Selected Financial Information Consolidated Condensed Balance Sheets Expressed in United States dollars

March 31, December 31, 2008 2007 ------------------------------ (Expressed in United States dollars) (Unaudited) (Unaudited)

ASSETS

Current Assets Cash and cash equivalents $ 4,229,936 $ 6,869,381 Accounts receivable 413,470 379,268 Crude oil inventory 434,275 373,770 Prepayments 529,981 311,537 Assets to be disposed 77,058 71,294 Other current assets 165,700 167,404 ------------------------------ Total current assets $ 5,850,420 $ 8,172,654

Non Current Assets Prepaid financing fees 100,057 74,804

Capital assets, net (including unevaluated amounts of $13,124,724 and $9,444,742, respectively) 53,979,083 51,304,619 ------------------------------ Total Assets $ 59,929,560 $ 59,552,077 ------------------------------ ------------------------------ LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable - trade $ 1,765,563 $ 481,665 Accrued liabilities 6,227,777 6,639,887 Liabilities to be disposed 365,116 336,446 Total current liabilities $ 8,358,456 $ 7,457,998 ------------------------------ Long term debt 12,111,003 11,697,231 Other non current liabilities 19,715 37,778 Provision for future site restoration 236,488 230,720 ------------------------------ Total Liabilities $ 20,725,662 $ 19,423,727 ------------------------------ Temporary Equity $ 2,119,530 $ 2,119,530 ------------------------------ Stockholders' equity: Common stock, par value $0.10; authorized - 500,000,000 shares at March 31, 2008 and at December 31, 2007; shares issued, issuable and outstanding - 242,120,974 at March 31, 2008 and at December 31, 2007 24,212,096 24,212,096 Capital in excess of par value 245,596,724 245,316,295 Accumulated deficit (232,724,452) (231,519,571) ------------------------------ Total stockholders' equity $ 37,084,368 $ 38,008,820 ------------------------------ Total Liabilities, Temporary Equity and Stockholders' Equity $ 59,929,560 $ 59,552,077 ------------------------------

CanArgo is an independent oil and gas exploration and production company with its oil and gas operations currently located in Georgia.

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 harbour 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 will be attained.

Contacts: US and NORWAY Eric Cameron Gambit Hill & Knowlton AS +47 96 62 55 94 Email: canargo@hillandknowlton.com

US and NORWAY Christopher Rodsten Gambit Hill & Knowlton AS +47 96 62 55 94 Email: canargo@hillandknowlton.com

US and NORWAY Fredrik Tangeraas Gambit Hill & Knowlton AS +47 96 62 55 94 Email: canargo@hillandknowlton.com

2008-05-12 19:29:50 0359459 MARKETWIRE