Feb 2010

Shelton Petroleum announces an independent Western reserves report on the company’s licenses in Russia and Ukraine. Reserves amount to 14 million barrels of oil, and the potential in the company’s oil and gas fields amounts to 343 million barrels of oil equivalent.

“It is extremely positive that an independent valuation body has now confirmed the great potential in Shelton Petroleum’s license portfolio. Already, we have cost-efficient oil production from the Lelyaki field in Ukraine, and we have found oil in both of our exploration wells on Rustamovskoye in Russia. These things, taken together with our resource-rich offshore licenses, mean we are confident of continuing on this positive path of development,” says Robert Karlsson, CEO of Shelton Petroleum.



* Aysky and Suyanovskoye were added to the portfolio in autumn 2009 and have not yet been subject to an independent audit

All reserves and resources are net to Shelton Petroleum.

All amounts are in million barrels of oil equivalents.

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

Ramp up production at Lelyaki

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 field’s total daily production in 2009 was over 600 barrels per day. The company will 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.

Commence production in Bashkiria

Shelton Petroleum and continue exploration and commence extraction in order to realize the potential of the Rustamovskoye, Aysky and Suyanovskoye license blocks. The short-term objective is to commence 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 undervalued assets in Russia and Ukraine. Shelton Petroleum holds an option to acquire a major share holding in Tomsk Refining AB, which owns a newly built refinery in Western Siberia.

For more information, please contact:

Robert Karlsson, CEO, Shelton Petroleum, tel +46 709 565 141


Zenon Potoczny, President, Shelton Petroleum, tel. +1 416 566 7163



Note on the reserves and resources calculation

Reserves are based upon independent accounting 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, which fall under the category “unrisked contingent 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.

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 found oil in its first two wells and measured commercial flow rates. In Ukraine, a strategic partnership with Ukrnafta, Ukraine's largest oil and gas company, 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. The Shelton Petroleum share is traded on the NGM stock exchange under the symbol SHEL B.