Nov 2010


• Production of oil commenced in Russia

• Significant equity interest in Tomsk Refining acquired

• Equity swap and strategic relationship with Baltic Oil Terminals in November

• SEK 10 million raised through a private placement

• Revenue for the period January-September: SEK 27 (0) million

• Operating result for the period: SEK -5 (-11) million

• Profit for the period after tax: SEK -7 (-11) million

• Basic and diluted earnings per share: SEK -0.02 (-0.08)

(For complete interim report see attached file)

Statement from the CEO

Shelton Petroleum has reached several significant milestones since the publishing of our last interim report. Following a successful exploration program, we have commenced production of our first Russian oil on the Rustamovskoye field in Bashkiria. We are currently finalizing arrangements to put the other exploration well on production and also plan to start a development drilling program during 2011.

Shelton Petroleum’s long-term strategy is to become an integrated oil and gas company. An integrated business model adds new revenue streams and spreads the operational risks between the upstream and downstream segments. In September, we acquired a significant equity interest in Tomsk Refining, a Swedish company that owns a brand new refinery in Tomsk in Western Siberia. Furthermore, Shelton Petroleum recently announced a share swap and strategic relationship with Baltic Oil Terminals PLC, an AIM listed company with a terminals and transshipment business in Kaliningrad on the coast of the Baltic Sea.

During 2011, we look forward to increasing our production volumes and to take further steps towards becoming an integrated oil company by consolidating and strengthening our position on the downstream side.

Robert Karlsson

Shelton Petroleum’s reserves and strategic objectives

Shelton Petroleum operates upon a good base of reserves and resources. The company has formulated the following strategic objectives:

Ramp up production at Lelyaki, Ukraine

The Lelyaki oil field was previously one of the largest producing oil fields in the Soviet Union, with a cumulative production of 385 million barrels of oil. The company plans to increase production by drilling new wells and by re-entering and sidetracking suspended wells. Well interventions show very good economics as the required investments are low. The new wells are drilled in close proximity to pipeline infrastructure for rapid tie-in.

Increase production in Bashkiria

Shelton Petroleum will continue exploration and increase extraction of oil in order to realize the potential of the Rustamovskoye, Aysky and Suyanovskoye license blocks. The short-term objective is to increase production from Rustamovskoye, where the company has completed a successful exploration program and found oil in the first two wells.

Convert resources to reserves

Shelton Petroleum will take steps to pursue its potentially high-yield exploration opportunities offshore in Ukraine and onshore in Russia. Work will include analyzing historical exploratory data, collecting new seismic and selective and carefully assessed drilling.

Acquire new licenses and integrate vertically into the oil refining business

Shelton Petroleum has built effective personal relationships, strategic regional partnerships and a portfolio of projects onshore and offshore. Local knowledge and experience enables the company to identify, acquire and exploit attractively valued assets in Russia and Ukraine. Shelton Petroleum holds a significant share holding in Tomsk Refining AB, which owns a newly built refinery in Western Siberia, and Baltic Oil Terminals, an AIM listed company with a terminals and transshipment business in Kaliningrad on the coast of the Baltic Sea.

July – September 2010

The merger between Petrosibir and Shelton Canada Corp. was completed on 31 December 2009 and the group adopted the new name Shelton Petroleum during the first quarter of 2010. Consequently, the consolidated balance sheets for 30 September 2010 and 31 December 2009 include both companies but the profit and loss statements for July-September 2009 and January-September 2009 refer only to Petrosibir. From 1 January 2010 the consolidated profit and loss statement includes operations in Ukraine, including sales of oil produced. All numbers are net to Shelton Petroleum, unless otherwise indicated.

Revenue for the third quarter 2010 amounted to SEK 8.1 million compared to SEK 0.0 million in the third quarter 2009. Oil production at Lelyaki during the third quarter amounted to 20,000 barrels, or 218 barrels per day, net to Shelton Petroleum, which is in line with the first and second quarters of the year. Investments at Lelyaki are self-financed through cash generated by sale of oil.

In addition, one of the two successful exploration wells on the Rustamovskoye field was put into production. In September well RS#2 was completed and is now producing the company’s first Russian oil. Currently, produced oil is being stored and therefore not included in sales. Shelton Petroleum is currently finalizing arrangements to put the other exploration well into production and expect revenue recognition from these two wells during Q4 2010.

The price of Ukrainian oil has increased significantly during 2010 compared to 2009. At the auctions in August and September, the company sold oil at USD 59 per barrel compared to an average price of USD 45 in the first quarter and USD 54 in the second quarter. Revenue during the quarter increased to SEK 8.1 million due to the increased average prices. The inventory level as per the balance sheet date amounted to 9,500 barrels of oil, compared to 8,600 barrels at the end of the second quarter.

Operating expenses amount to SEK -11.5 (-2.7) million and consist primarily of costs for raw materials, consumables and personnel costs. The operating result for the period amounted to SEK -6.6 (-1.9) million. Financial items include an exchange rate loss due to a weakening of the dollar, which affected the loan to a shareholder in Tomsk Refining that was converted into shares in that company. The total comprehensive income includes exchange rate differences not affecting cash flow on the internal group loan in foreign currency.

As production in Bashkiria commenced, there was a shift from intangible to tangible fixed oil assets in the balance sheet. The group had SEK 38 million in cash and cash equivalents at the end of the period compared to SEK 13 million at September 30, 2009. Equity per share at 30 September 2010 was SEK 0.52 (0.46) and the equity assets ratio was 78 (91) per cent.

Major events occurring after the reporting period

As a result of the acquisition at the end of September of 3,900,000 shares in Tomsk Refining AB the number of shares and votes in Shelton Petroleum increased in October.

In November Shelton Petroleum entered into a strategic relationship with Baltic Oil Terminals PLC, a UK public company listed on the AIM market in London. Under the terms of a strategic relationship, Shelton issued 54,000,000 new B Shares to Baltic for 14,957,368 new ordinary shares of Baltic Oil Terminals. Following completion of the equity swap, Shelton owns approximately 19.5 per cent of Baltic's enlarged issued share capital.

After an audit by The State Geological Survey of Ukraine, Shelton’s subsidiary Kashtan Petroleum was recommended to temporarily halt its production in October while a review was conducted to resolve whether Kashtan Petroleum or its subcontractor is licensed to carry on certain economic activity. The subcontractor in this case is Ukrnafta, Ukraine’s largest oil and gas company, of which the Ukrainian state is a fifty percent shareholder. Kashtan Petroleum has replied that Ukrnafta holds all necessary permits necessary for Kashtan Petroleum to produce oil. It is to be noted that Kashtan Petroleum has lifted oil under this arrangement for many years. Ukrnafta has informed Kashtan Petroleum that there are also other cases in the region where production has been halted for apparently groundless reasons. Ukrnafta representatives have met with the Minister of Environmental Protection, of which The State Geological Survey is a part, and agreed that the issue will be put on the agenda of the next meeting, after which Ukrnafta expects a resolution of the dispute and restoration of production. As a consequence, the revenue from Ukraine will be lower in the fourth quarter compared to the third quarter. An offsetting factor is the expected sales of the first Russian oil that is currently being produced.

The parent company

The parent company's balance sheet total as at the period end amounted to SEK 286 million. Cash and cash equivalents amounted to SEK 14 million. The result after tax for the period January-September was SEK -9 million.

Risk factors and uncertainties

A detailed account of the risks facing the company appears in the 2009 annual report. During the period, there has been no major change in material risk factors or uncertainties during the period for the group or the parent company. Risks include exploration risk, oil price risk, exchange rate risk, liquidity risk, credit risk, interest rate risk and political risk, among others.

Upcoming financial reporting

Year-end Report January – December 2010 25 February 2011

Annual Report 2010 27 April 2011

Interim Report January – March 2011 27 May 2011

Interim Report April – June 2011 26 August 2011

Interim Report July – September 2011 29 November 2011

Publication under Swedish law

Shelton Petroleum is publishing this information in accordance with the Swedish Financial Markets Act (Sw. Lag om värdepappersmarknaden) and/or the Swedish Financial Trading Act (Sw. Lag om handel med finansiella instrument). This information was released for publication on 30 November 2010 at 08:30 CET.

This report has not been reviewed by the company's auditors.

For more information, please contact:

Robert Karlsson, CEO, +46 709 565 141, robert.karlsson@sheltonpetroleum.com

Shelton Petroleum AB

Swedish company number: 556468-1491

Birger Jarlsgatan 2

114 34 Stockholm

Tel: +46 8 407 18 50


About Shelton Petroleum

Shelton Petroleum is a Swedish company focused on exploring and developing concessions in the Volga-Urals area in Russia and the resource-rich basins of Ukraine. Shelton Petroleum has built effective personal relationships, strategic regional partnerships and a portfolio of projects onshore and offshore. The company holds three licenses in the Russian republic of Bashkiria, located southwest of the Ural Mountains. The license blocks, which border one another, have an area of over 500 square kilometers and are surrounded by other producing oil fields. The company has commenced production from one of its two successful exploration wells in Russia. In Ukraine, Shelton Petroleum’s wholly-owned subsidiary Zhoda 2001 has a strategic partnership with Ukrnafta, Ukraine's largest oil and gas company. It provides Shelton Petroleum with a stake in the oil producing Lelyaki field in Chernigov Region close to Poltava. Shelton Petroleum also has a Joint Investment Agreement with Chornomornaftogaz, the leading Ukrainian oil and gas company in offshore development, that gives it a fifty per-cent stake in three major license areas in the Azov and Black Sea regions. Shelton Petroleum is a substantial shareholder in Tomsk Refining, a Swedish company that owns a brand new refinery in Tomsk in Western Siberia. Shelton Petroleum recently announced a share swap and strategic relationship with 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. The company has applied for a listing of its share on NASDAQ OMX Main Market.

Note on the reserves and resources calculation

Reserves are based upon assessment carried out by Trimble Engineering Associates and AGR TRACS International Consultancy Ltd. The calculations have been derived in accordance with the Canadian Oil and Gas Evaluation Handbook and have been compiled in cooperation with the Society of Petroleum Evaluation Engineers (www.spee.org) and the Canadian Institute of Mining, Metallurgy & Petroleum (Petroleum Society). Resources have been estimated by AGR TRACS. Resources have a lower probability of extraction than reserves. All estimates are based upon information as of 30 September 2009. Reserves and resources refer to the amounts of oil and gas attributable to Shelton Petroleum's share in the fields where the company conducts joint operations via joint ventures and joint investment agreements. Amounts are reported in millions of barrels of oil equivalent. Aysky and Suyanovskoye are two exploration licenses that lie immediately next to Rustamovskoye. Drilling during the Soviet era has confirmed the presence of oil in these fields, but the company has yet to complete any exploration of its own in these areas. These licenses were acquired during the fall of 2009 and were not included in the reserves studies.