12
Jan 2011
PRODUCTION OF OIL FROM THE SECOND RUSSIAN WELL COMMENCED

Shelton Petroleum is pleased to announce that it has successfully completed its RS#1 well in Bashkiria, Russia. The company is now producing oil from both of the wells drilled in the exploration program. The company sells its oil on the local Russian market. Bashkiria is one of the most prolific Russian oil regions and has the largest refinery capacity in the country.

"This well completion is an important milestone for Shelton Petroleum as we now have started production from both of the wells that we have drilled on Rustamosvkoye. It validates the future development potential of the license area and we look forward to further drilling activity to significantly enhance produced volumes from the field,” says Robert Karlsson, CEO of Shelton Petroleum.

The well has showed an initial flow rate of about 150 barrels per day. It will be tested under different regimes during the coming months in order to optimize production levels. Production from the two wells is initially carried out from a Devonian sandstone formation. The upcoming work program will further define drill targets to exploit the multizone oil potential in this part of the Volga Urals Basin. The oil is sold on the local Russian market. In addition to the revenue and cash flow generated from the sales of oil, the production also contributes valuable reservoir information necessary to establish an optimal drilling program for the field.

The Rustamovskoye license area is 52 square kilometers. Shelton Petroleum also holds the two adjacent licenses Aysky (187 square kilometers) and Suyanovskoye (300 square kilometers). Soviet drillings on these blocks have confirmed the presence of hydrocarbons.

For more information, please contact:

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

robert.karlsson@sheltonpetroleum.com

www.sheltonpetroleum.com

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. The company holds three licenses in Russia 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. Ukrainian operations include onshore as well as offshore projects. Shelton Petroleum is pursuing an integrated business model and has acquired significant equity stakes in Tomsk Refining AB and Baltic Oil Terminals PLC, the latter being 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.

The information provided herein is such that Shelton Petroleum AB is obligated to disclose it pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. It was submitted for publication at 1.00 p.m. on 12 January 2011.