30
Aug 2011
Reinstatement of production at the Lelyaki oil field in Ukraine

Kashtan Petroleum, the operator of Shelton Petroleum’s 45% interest in the Lelyaki oil field, has informed Shelton Petroleum that the State Geological Committee has now completed its review and resolved to lift the temporary suspension, which in turn enables the company to reinstate production at Lelyaki. The field operator will take immediate steps to resume production and sale of oil.

“We are very pleased that the measures taken will allow us to resume operations on the Lelyaki field. The approval from the committee is the last major step needed to move forward. We are now able not only to start production, but also to continue our program of new wells, workovers and sidetrack drilling to enhance productivity from this asset and add incremental volumes ”, says Zenon Potoczny, President of Shelton Petroleum.

During the summer, new measures were launched to restart production by fulfilling the requirements of the State Geological Committee, under the Ministry of Ecology and Natural Resources. An independent technical analysis has been completed and the State Reserve Committee and Nadra of Ukraine have both completed their reviews. The State Geological Committee, which recommended the temporary shut-in of the field in 2010, has in Act no. 59 and letter no. 3382/01/14-11 lifted the suspension, which in turn enables the company to reinstate production.

The field operator will take immediate steps to resume production. In addition, a workover crew is being assembled to continue the work program designed to increase production volumes. The decision by the committee also allows the operator to sell oil inventory of over 7,000 barrels net to Shelton Petroleum at the next public auction.

For more information, please contact: Zenon Potoczny, President, Shelton Petroleum, +1416566 7163

zenon.potoczny@sheltonpetroleum.com

Robert Karlsson, CEO, Shelton Petroleum, tel +46 709 565141 robert.karlsson@sheltonpetroleum.com

www.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 a significant 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.