8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 24, 2008

CANARGO ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	001-32145	91-0881481
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

CanArgo Energy Corporation
P.O. Box 291, St. Peter Port
Guernsey, British Isles	GY1 3RR
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code + (44) 1481 729 980

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Item 1.01	Entry into a Material Definitive Agreement
Item 7.01	Regulation FD Disclosure
Item 9.01.	Financial Statements and Exhibits
Signature
EXHIBIT 1.0-Form of firm commitment underwriting agreement
EXHIBIT 99.1- Press Release dated July 24, 2008 issued by CanArgo Energy Corporation

The matters discussed in this Current Report on Form 8-K 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 harbor 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.

Section 1—Registrant’s Business and Operations

Item 1.01 Entry into a Material Definitive Agreement

On July 24, 2008, eight substantially identical firm commitment underwriting agreements were entered into by CanArgo Energy Corporation (the “Company” or “CanArgo”) with eight separate foreign private investors who severally agreed to purchase up to 242,000,000 unsubscribed for shares in the Company’s proposed rights offering first announced on April 23, 2008 for an aggregate commitment of up to $24.2 million in unsubscribed for shares.

The principal terms of each agreement are as follows:

• each investor has agreed to subscribe, at the subscription price of the proposed rights offering (being $0.10 per share), for shares which are not subscribed for in the rights offering (the amounts which each investor has agreed to underwrite being respectively $10m, $5m, $4.2m, $2m, $1m, $1m, $0.5m and $0.5m, making an aggregate total of $24.2m);

• to the extent that the rights offering is not fully subscribed, the remaining unsubscribed shares will be taken up by the investors pro rata to their respective underwriting commitments;

• each individual investor will be entitled to an aggregate commission equal to 7% of the amount underwritten by that investor, with the commission being payable in cash or CanArgo shares at the subscription price at the option of the investor; provided, however, if the investor is an existing stockholder it will only receive a commission for the part of the underwritten amount that exceeds the pro rata amount of shares that the investor would receive pursuant to an exercise of its pre-emptive rights;

• the underwriting commission will be paid even if the Company does not carry out the rights offering and in such event will be paid on 31 December 2008;

• each investor agrees to comply with all applicable laws and stock exchange regulations and not to sell, offer to sell or solicit offers to purchase any of the shares it purchases in the “United States” or to “U.S. persons” or to engage in any “directed selling efforts” (as each term is defined in Regulation S promulgated under the U.S. Securities Act of 1933, as amended) in the United States;

• among other customary representations and warranties each investor represents and warrants that it is not a “U.S. person” and is not and is not required to be a member of the U.S. Financial Industry Regulatory Authority, Inc. or registered as a broker-dealer under Section 15 of the U.S. Securities Exchange Act of 1934, as amended;

• each investor agrees it will not and it will cause its directors, shareholders (registered or beneficial) or associates not to deal in any shares if the effect of such dealing would in any way impinge upon the ability to subscribe for all the unsubscribed shares without the investor or its respective directors, shareholders (registered or beneficial) or associates exceeding a holding of 49.99% of the aggregate issued shares in the capital of the Company; and

• the period for subscribing for shares in the rights offering shall not exceed four weeks.

     The full text of the form of agreement is filed as Exhibit 1.0 to this Current Report.

Section 7—Regulation FD

Item 7.01. Regulation FD Disclosure.

July 24, 2008 — The Company announced today that the group of eight separate foreign private investors who had previously signed non-binding letters of intent with the Company have now entered into a firm commitment underwriting with the Company to purchase up to $24.2 million in unsubscribed for shares in the Company’s planned rights issue first announced on April 23, 2008. Each investor has undertaken, pro rata to its share of the underwriting amount, to purchase, at the same subscription price as common stockholders, shares of CanArgo common stock not otherwise purchased by stockholders in the rights offering.

A copy of the Press Release is attached hereto as Exhibit 99.1.

The information in this Item 7.01 (including its exhibit) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to liability of that section. The information in this report (including its exhibit) shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.

Section 9—Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits

     (d) Exhibits

1.0	Form of firm commitment underwriting agreement
99.1	Press Release dated July 24, 2008 issued by CanArgo Energy Corporation

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CANARGO ENERGY CORPORATION
Date: July 24, 2008	By:	/s/ Jeffrey Wilkins
		Jeffrey Wilkins,
		Corporate Secretary

EXHIBIT INDEX

Exhibit No.	Description
1.0	Form of firm commitment underwriting agreement
99.1	Press Release dated July 24, 2008 issued by CanArgo Energy Corporation

EX-1.0

Exhibit 1.0

UNDERWRITING AGREEMENT

This underwriting agreement (the “Agreement”) has been entered into by and between

CanArgo Energy Corporation, a Delaware corporation, having a place of business at P.O. Box 291, St. Peter Port, Guernsey, GY1 3RR, British Isles (the “Company”);

and

[    ] (the “Underwriter”).

1	BACKGROUND
1.1	The Company is contemplating a primary offering (the “Offering”) of 242,107,390 common shares in the Company (the “Shares”), each share with a nominal value of US$0.10, with gross proceeds of up to US$24.210739 million. The Offering will be structured as a rights offering directed towards existing shareholders of the Company. The subscription price in the Offering (the “Subscription Price”) will be US$0.10 per Share.
1.2	In connection with the Offering, a group of eight separate foreign private investors (non-US) have signed non-binding letters of intent with the Company detailing the principal terms of a proposed standby underwriting agreement that upon execution is expected to provide an aggregate firm commitment to purchase up to US$24.2 million in unsubscribed for shares (the “Underwriting Group”).
1.3	The Company has engaged Glitnir Securities AS (the “Manager”) as manager in relation to the Offering.
2	UNDERWRITING COMMITMENT
2.1	By completing and signing this Agreement, the Underwriter irrevocably undertakes, on the terms and conditions set out in this Agreement, to subscribe, at the Subscription Price, for Shares which are not subscribed for in the Offering, limited to a maximum aggregate subscription amount of
	US$ [    ] (the “Underwriting Amount”).
2.2	In the event that the Offering is not fully subscribed, the remaining part of the Offering will be allocated pro rata to the Underwriter and other underwriters in the Underwriting Group proportionate to the underwriting amounts under their respective underwriting commitments. Shares which are subscribed for in the Offering by the Underwriter shall be deducted when calculating the underwriting amount for that Underwriter.
2.3	The Underwriter shall not be liable for the failure of any subscriber in the Offering to pay for Shares validly subscribed for by such subscriber.
2.4	The Underwriter, together with the other underwriters in the Underwriting Group and their respective directors, shareholders (registered or beneficial) or associates will not subscribe for more than 49.99% of the aggregate issued shares in the capital of the Company, including any unsubscribed for Shares in the Offering. In other words, they will not (and will procure that none of their directors, shareholders (registered or beneficial) or associates will) deal in any Shares if the effect of such dealing would in any way impinge upon their ability to subscribe for all the unsubscribed Shares without them or their respective directors, shareholders (registered or

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beneficial) or associates exceeding a holding of 49.99% of the aggregate issued shares in the capital of the Company.

3	NOTIFICATION, SUBSCRIPTION AND PAYMENT
3.1	Immediately following the expiry of the application period for the Offering (the “Application Period”), the Company shall notify the Underwriter in writing of the number of Shares allocated to the Underwriter (the “Allocated Shares”), the total amount which is to be paid for the Allocated Shares and the due date for such payment (the “Allocation Notice”).
3.2	The Underwriter irrevocably authorizes and instructs the Manager to subscribe, and the Company to issue, for the Allocated Shares on behalf of the Underwriter.
3.3	Payment for Allocated Shares shall be made within seven business days of the Allocation Notice.
4	UNDERWRITING CONSIDERATION
4.1	As underwriting consideration, the Company will pay to the Underwriter a gross underwriting commission of 7% of the amount underwritten (the “Underwriting Consideration”). However, if the Underwriter is an existing shareholder in the Company, it will only receive Underwriting Consideration for the part of the Underwriting Amount exceeding its pro rata share pursuant to pre-emptive rights.
4.2	At the Underwriter’s option, the Underwriting Consideration shall be satisfied either:-

(a)	by a payment from the Company to the Underwriter in cash immediately following the issuance of any or all of the Unsubscribed Shares; or
(b)	by the issue by the Company to the Underwriter of Shares at the Offer Price up to the amount of Underwriting Consideration payable in accordance with paragraph 4.1 (the “Commission Shares”).

4.3	The Underwriter shall only be entitled to subscribe for the Commission Shares pursuant to paragraph 4.2 above if and to the extent that following (1) the issue of any or all of the Allocated Shares to the Underwriter pursuant to the Underwriter’s underwriting obligations and (2) the issue of any Commission Shares pursuant to paragraph 4.2 above, the Underwriter and the other underwriters in the Underwriting Group (and any of their respective directors, shareholders (record or beneficial) or associates or any of them) holds or would hold or is or would be otherwise interested in not more than 49.999999% of the aggregate issued and outstanding Shares in the capital of the Company.
4.4	Payment of the Underwriting Consideration shall (if it is to be satisfied in cash) be made to the bank account indicated by the Underwriter in this Agreement, within five days following the receipt of the gross proceeds of the Offering by the Company.
4.5	The Underwriting Consideration shall be paid regardless if the Company does not to carry out the Offering. In such event, the Underwriting Consideration shall be paid in cash by December 31, 2008.

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5	INFORMATION — LIABILITY
5.1	The Underwriter has sufficient knowledge, sophistication and experience in financial and business matters to be capable of evaluating the merits and risks of a decision to participate in the Underwriting Group. The Underwriter has had access to such financial and other information concerning the Company and the Shares as it deemed necessary or desirable in connection with the participation in the Underwriting Group, and has made such investigation with respect thereto as it deems necessary. The Underwriter has made its own assessment of the Company, the Shares and the terms of this Agreement and has, to the extent deemed necessary by the Underwriter, consulted with its own independent advisors and satisfied itself concerning the relevant tax, legal, currency and other economic considerations. The Manager makes no representation or warranty, express or implied, to the Underwriter regarding the accuracy or completeness of the information (whether written or oral) concerning the Company or the Offering received by the Underwriter, whether such information was received through the Manager or otherwise. The Manager disclaims any liability in this regard and the Underwriter understands and agrees that it is entering into this Agreement on this basis.
5.2	The Underwriter is responsible for ensuring that the terms of the Underwriting commitment may be fulfilled without breaching applicable law or regulations or, including, without limitation, complying in all material respects with all applicable provisions of the U.S. Securities Act of 1933, as amended (the “Securities Act”), U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) and all applicable foreign securities laws and the rules and regulations promulgated thereunder, as well as the rules of The American Stock Exchange (“AMEX”) and the Oslo Stock Exchange (“OSE”), in connection with the offer, offer for sale, solicitation of offers to purchase and the sale of any and all Allocated Shares purchased by the Underwriter, and the Company’s or the Underwriter’s own articles of association. The Underwriter is aware and accepts and agrees that his identity, the fact that this Agreement has been entered into, and the Underwriting Amount may be made public by the Company in connection with its filings with the United States Securities and Exchange Commission (“SEC”), the AMEX and the OSE and agrees to cooperate with the Company and to provide all such information as may be required under the rules of the SEC, AMEX and OSE in connection with all such filings. The Underwriter further acknowledges, agrees and confirms that in relation to any dealings in Allocated Shares and/or Commission Shares it will comply (and will procure that its directors, shareholders (registered or beneficial) or associates will comply) with all U.S. and foreign securities laws, including, without limitation, the rules of the SEC, AMEX and the OSE. If the Underwriting Commitment cannot be fulfilled due to a breach of the above-mentioned rules, the Underwriter shall compensate the Company for any documented financial loss the Company suffers and further agrees to indemnify and hold the Company harmless from any claim, liability, loss, cost (including, without limitation, reasonable attorneys fees and expenses) or damage incurred by the Company in connection with or attributable to any untrue statement of a material fact or any omission to state a material fact necessary to make the statements contained herein or in any information furnished to the Company expressly for the purpose of being included in any such filings not misleading in light of the circumstances under which they were made.
5.3	It is understood that the Underwriter intends to resell the Allocated Shares and any Commission Shares outside the “United States” to non-“U.S. persons” (as each such term is defined in Regulation S (“Regulation S”) promulgated under the Securities Act at prices prevailing on the OSE or in negotiated transactions and in connection therewith the Underwriter agrees not to sell, offer to sell or solicit offers to purchase any of the Allocated Shares or Commission Shares in the United States or to U.S. persons or to engage in any “directed selling efforts” (as defined in Regulation S) in the United States.
5.4	The Underwriter hereby represents, warrants, covenants and agrees with the Company that: (i) the execution, delivery and performance of this Agreement has been duly authorized by all necessary corporate action on the part of the Underwriter and this Agreement has been duly

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executed and delivered by the Underwriter, (ii) the execution, delivery and performance of this Agreement by the Underwriter will not breach or violate the organizational documents of the Underwriter or any contract or other agreement, or law, rule, regulation, writ, order, judgment, decree or other legal requirement to which the Underwriter is a party or by which it or its assets are bound or affected, (iii) to the extent that provisions of this Agreement are expressed to be legally binding such provisions constitute legal, valid and binding obligations of the Underwriter enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity) and limitations on the enforceability of indemnification agreements or other agreements which are void as against public policy, and (iv) the Underwriter is not a U.S. person (as defined in Regulation S) and is not and is not required to be a member of the U.S. Financial Industry Regulatory Authority, Inc. or registered as a broker-dealer under Section 15 of the Exchange Act.

6	CONFIDENTIALITY
6.1	The Underwriter undertakes to treat as confidential all information relating to the Company not being publicly known, including but not limited to information that may fall within the definition of inside information under applicable law, received by him in connection with this Agreement and the Offering.
6.2	The Underwriter is aware of the duties and obligations regarding inside information, hereunder the criminal liability attaching to misuse of inside information and improper distribution of inside information, investigation requirements for primary insiders and rules prohibiting giving investor advice when in possession of inside information.
7	DURATION
7.1	If the Offering is not resolved by the Company by December 31, 2008, this Agreement shall expire.
7.2	The Application Period shall not be more than four weeks.
8	GOVERNING LAW AND JURISDICTION
8.1	This Agreement shall be governed by, and construed in accordance with, Norwegian law.
8.2	In relation to any legal action or proceedings to be taken in connection with this Agreement, each of the Company and the Underwriter irrevocably submits to the exclusive jurisdiction of the Norwegian courts with Oslo District Court as due venue.

* * *

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For the Underwriter	For the Company
Place and Date:	Place and Date:
Name:	Name:
Position:	Position:
Signature:	Signature:

*) When signing on behalf of another person, appropriate evidence of authority must be provided.

DETAILS OF UNDERWRITER (MUST BE COMPLETED)

First Name

Surname
or
Company Name

Address

Postal Code, City/State/Country

Date of Birth and National ID number
or
Company Registration Number

Telephone

Fax

e-mail

VPS account

Bank Account Details

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EX-99.1

Exhibit 99.1

CANARGO ENERGY CORPORATION

FOR IMMEDIATE RELEASE IN EUROPE & NORTH AMERICA

FIRM UNDERWRITING AGREED

July 24, 2008 — Guernsey, Channel Islands — CanArgo Energy Corporation (“CanArgo” or the “Company”) (OSE:CNR; AMEX:CNR) announced today that the group of eight separate foreign private investors who had previously signed non-binding letters of intent with the Company have now entered into a firm commitment underwriting with the Company to purchase up to $24.2 million in unsubscribed for shares in the Company’s planned rights issue first announced on April 23, 2008. Each investor has undertaken, pro rata to its share of the underwriting amount, to purchase, at the same subscription price as common stockholders, shares of CanArgo common stock not otherwise purchased by stockholders in the rights offering, thus ensuring that the Company will raise maximum proceeds from the offering. Each individual investor will be entitled to an aggregate underwriting commission equal to 7% of the investor’s pro rata underwritten amount with the fee payable in cash or CanArgo shares at the subscription price at the option of the investor.

The Company also announced that it has appointed Glitnir Securities AS to assist the Company as manager and foreign subscription agent in connection with the proposed rights issue.

Following the approval of the increase in authorized shares of common stock at the annual general meeting of stockholders last week and with the firm underwriting now in place, the Company can proceed to file an amendment to its Registration Statement originally filed with the Securities and Exchange Commission on May 2, 2008. Once it has complied with all regulatory requirements, the record date for the allocation of subscription rights, the offer period and the closing date will be announced.

Vincent McDonnell, Chairman, President and Chief Executive Officer commented, “With the financing from the planned rights issue now guaranteed, we can look forward to the implementation of our proposed production, development and appraisal plans in Georgia. The majority of the capital raised will be used to continue with our planned production enhancement work at the Ninotsminda Field which will focus on low to medium risk opportunities with the potential to significantly increase production and grow revenues. It will also allow us to continue with our well testing operations at the Manavi 12 well where a possible oil-water contact has been identified with a potential oil column of 551 feet (168 metres) remaining to be tested”.

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.

For more information please contact:

US and NORWAY
Eric Cameron, Christopher Rodsten, Fredrik Tangeraas
Gambit Hill & Knowlton AS
Tel: +47 96 62 55 94
Email: canargo@hillandknowlton.com