Shelton Petroleum comments on Petrogrand’s fairness opinion. The valuation is based on information that contradicts Petrogrand’s previous assessment of Shelton Petroleum’s reserve base.
On 22 January 2014, Shelton Petroleum announced a public offer to the shareholders of Petrogrand. Based on a fairness opinion from an investment bank, the board of directors of Petrogrand recommends their shareholders not to accept the offer.
Petrogrand has stated that it has “valued Shelton based on recognized methodologies in the international capital markets”. In fact, the valuation assumes that Shelton Petroleum’s oil reserves in Russia amount to 1 million barrels, which is an assessment made in a reserves report from 2009. Since then, during the four years up to date, there has been significant progress in Shelton Petroleum’s assets. As an example, the valuation does not reflect the recent successful drilling results from autumn 2013. Petrogrand has previously described the results from the latest #12 well as “extremely encouraging” in a report that Petrogrand sent to Shelton Petroleum in September 2013. In the same report, Petrogrand assesses that if one new well is drilled with the same results as in well #12, then reserves may amount to 5-6 million ton, which is equivalent to approximately 40 million barrels.
“Making a reserves assessment is complex and always subject to judgment. However, when Petrogrand base their recommendation on a fairness opinion that assumes reserves of 1 million barrels when they previously have stated that reserves may amount to up to 40 million barrels, it just does not add up”, says Robert Karlsson, CEO of Shelton Petroleum.
Shelton Petroleum in cooperation with Aktiespararna (The Swedish Shareholders’ Association) hosted a presentation of the public offer yesterday. The presentation in pdf format as well as a video recording of the event is available at www.sheltonpetroleum.com and via direct link below. The video has been broken up in two parts.
The presentation in pdf is attached (see pages 21-22 for Petrogrand’s earlier assessment)
Shelton Petroleum comments on the offer to the Petrogrand shareholders (video in Swedish) http://streamio.com/api/v1/videos/5315dab45b9035708700011d/public_show?player_id=53158be15b903561e7000750
Presentation of Shelton Petroleum (video in Swedish)
For more information, please contact:
Robert Karlsson, CEO, Shelton Petroleum, +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 Russia and the resource-rich basins of Ukraine. In Russia, the company holds three licenses in the Volga-Urals area in Bashkiria 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. The Shelton Petroleum share is traded on NASDAQ OMX Stockholm under the symbol SHEL B.