Planning is being done for up to a six well drilling program, giving a total of up to eight production wells, with the new wells coming on stream starting the first half of 2012. Initial investments in project design and preparation of the drill pad have already been made. A drilling company will be contracted when the first tranche of funds from the liquidation of Tomsk Refining AB will be received, which is expected during the third quarter this year.

“We are very pleased to announce the drilling campaign on the Rustamovskoye field. It marks the start of a development program that we through focused efforts have been working towards throughout a successful four-year exploration program. We are excited about the incremental production this drilling program may provide as well as gaining more insight into the ultimate potential of the Rustamovskoye field," said Robert Karlsson, CEO of Shelton Petroleum.

An associated fluid processing facility will be constructed. Facility design throughput capacity will exceed production volumes from the six new wells so that additional future wells can be tied in without major investments. All the wells will be pipeline connected to this facility, which includes an oil shipping and load out facility.

Initially, test oil has been trucked to market. However as production volumes increase the company expects to be able to deliver to the closest oil sales pipeline point either by truck or lateral pipeline connection.

Shelton Petroleum currently produces oil from two wells, RS#1 and RS#2, on the Rustamovskoye field. Initial flow rates per well amount to 70-160 barrels per day. The drilling of six new wells is the first step in a long-term development program of Shelton Petroleum’s three adjacent licenses in Bashkiria. With eight wells on production, the company will be able to generate cash flow to be used in financing further production and exploration drilling.

Further drilling on Rustamovskoye is anticipated as results from the first program become known.

In addition, new seismic control acquired during the second quarter of this year indicates the possibility of extending the Rustamovskoye oil field to the east. Other exploration drilling is being planned on new structures identified on the neighboring Aysky license with a potential of over twenty million barrels according to an estimate by the independent seismic service company Udmurtgeofizika.

Time plan for the development program

The preparation of the drill pad is underway. A tender process for the drilling company has been initiated and a contract will be entered into once Shelton Petroleum has received the first tranche of funds from the liquidation of Tomsk Refining AB. The company expects to be able to spud the first production well during 2011 and drill a total of six new wells coming on production starting the first half of 2012. Shelton Petroleum will continuously update the financial markets on the program’s progress.

Capital expenditure

The estimated cost for the six new wells is approximately USD 11 million. Investments in facilities and infrastructure amount to approximately USD 6 million. The facility has a design throughput capacity significantly exceeding expected volumes from the six new wells allowing for the tie in of additional wells without major investments. The oil treatment center will be the hub for additional drilling on Rustamovskoye and the adjacent Aysky field. The total capital expenditure for the planned development program will amount to approximately USD 17 million, and will to a large degree be financed by proceeds from the liquidation of Tomsk Refining AB, of which Shelton Petroleum is the second largest shareholder.

Information on Bashkiria

Bashkiria lies within the resource-rich Volga-Ural basin and is one of the Russian Federation’s primary oil regions. The republic has a daily production of 300,000 barrels per day and Russia’s largest refinery capacity of one million barrels per day. Shelton Petroleum holds three adjacent licenses in Bashkiria: Rustamovskoye (52 square kilometers), Aysky (187 square kilometers) and Suyanovskoye (300 square kilometers).

For more information, please contact:

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 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.