The Board of Shelton Petroleum has resolved to offer the holders of the convertible bond 2009/2011, which matures on 31 December 2011, by no later than 6 December 2011 to subscribe to a new convertible bond maturing on 31 December 2013. Convertible bond 2009/2011 would thereby be exchanged by a new convertible bond. The loan amount in the convertible bond 2009/2011 is SEK 29520 thousand and it carries an annual interest of eight per cent. The conversion rate of convertible bond 2009/2011 is SEK 35.

The holders of convertible bond 2009/2011 are being offered to subscribe to a new convertible bond of SEK 29520 thousand with an annual interest of ten per cent. The conversion rate in the new convertible bond is SEK 16. Holders of seventy per cent of convertible bond 2009/2011 have notified Shelton Petroleum that they intend to subscribe to the offer. Shelton Petroleum will put up its wholly owned subsidiary Zhoda 2001 Corporation as collateral for the bond. Zhoda 2001 Corporation holds the Group’s 45% interest in the Lelyaki oil field in Ukraine. At a full subscription and a full conversion of the new convertible bond, a maximum of 1845000 new B shares would be issued, which corresponds to a dilution of 14.78 per cent.

To the extent that the holders of convertible bond 2009/2011 choose not to exchange their convertible bond for the new convertible bond, other qualified investors will be offered to subscribe to the new convertible bond. Holders of the convertible bond 2009/2011 that choose not to subscribe to the new convertible bond will receive a cash repayment on 31 December 2011.

Shelton Petroleum is currently conducting a development program with the objective to increase oil production volumes in Russia as well as in Ukraine. The Company has completed a successful exploration program on the Rustamovskoye block in Russia with commercial flow rates in two of two wells drilled. In July 2011 Shelton Petroleum announced an overall time plan for a development program including infrastructure and production wells on this field. A successful exchange of the convertible bond as described above is an important part of the financing of the production development program. On the Lelyaki field in Ukraine the Company is conducting a new program consisting of new production wells, work over of old wells and planning for future side tracking. Shelton Petroleum has a 45 percent interest in the Lelyaki field (Kashtan Petroleum) via the wholly owned subsidiary Zhoda 2001 Corporation. The largest oil and gas company in Ukraine, Ukrnafta, owns the remaining 55 percent.

Information on how the exchange of the convertible bond will be executed will be available on the Company’s website, www.sheltonpetroleum.com.

The information contained in this press release is not an offer or part of an offer to acquire or subscribe to financial instruments in Shelton Petroleum, and it also not an invitation or request to acquire or subscribe to financial instruments in the Company. The information contained in this press release is not intended for publication, release or distribution in or into the United States, Australia, Canada, South Africa, Japan, Hong Kong, New Zealand or any country under which laws and regulations there would exist an obligation to prepare, file, register or publish any information as a result hereof.

For more information, please contact:

Robert Karlsson, CEO, Shelton Petroleum, tel +46 709 565141

robert.karlsson@sheltonpetroleum.com

About Shelton Petroleum

Shelton Petroleum is a Swedish company focused on exploring and developing concessions in Russia and the resource-rich basins of Ukraine. The company holds three licenses in the Volga-Urals area and has commenced production on the Rustamovskoye field after a successful exploration program. In Ukraine, Shelton Petroleum’s wholly owned subsidiary has a joint venture with Ukrnafta and Chornomornaftogaz, two leading Ukrainian oil and gas companies. Shelton Petroleum is pursuing an integrated business model and has acquired an equity stake in Baltic Oil Terminals PLC, an AIM listed company with a terminals and transshipment business in Kaliningrad on the coast of the Baltic Sea. The Shelton Petroleum share is traded on the NGM stock exchange under the under the symbol SHEL B.