Under the terms of the strategic relationship, Shelton has agreed to issue to Baltic 54,000,000 new B Shares in the capital of Shelton (the “Shelton Shares”) and Baltic has agreed to issue to Shelton 14,957,368 new ordinary shares of 1 pence each in the capital of Baltic (the “Baltic Shares” and the “Equity Swap”, respectively). The exchange ratio has been calculated by reference to the average market closing price of Shelton B Shares and Baltic ordinary shares for the four weeks ending 2 November 2010, being SEK 0.759 and 25.89 pence, respectively, and an average SEK/GBP exchange rate over the period of 10.584, valuing each issue of shares at approximately SEK 41 million. The market closing prices on 5 November 2010 were SEK 0.76 for Shelton B shares and 25.5 pence for Baltic ordinary shares.

Following completion of the Equity Swap, Shelton will own approximately 19.5 per cent of Baltic’s enlarged issued share capital, and Baltic will own approximately 10.2 per cent of Shelton’s enlarged share capital. The Equity Swap is structured as an issue of equity in kind and no cash will be expended by either party.

Shelton and Baltic are involved in two separate but highly complementary areas of the oil industry. Baltic operates a terminals business in the Russian ports of Baltysk and Kaliningrad and its key asset is a 50% interest in the Rosbunker terminal in Baltysk which specialises in fuel oil (mazut). Trains are able to deliver products from all over Russia, the Former Soviet Union and Asia directly to the terminal. Baltic earns tolling fees and is also able to trade in these products in its own right. In addition to Rosbunker, Baltic also has interests in several other oil product assets in Kaliningrad, which derive revenues through processing and distribution of oil products to domestic markets. Baltic’s executive management has more than 40 years experience in the oil services industry from multiple locations, around the world, including the Former Soviet Union.

With Baltic’s expertise in oil trading, infrastructure and transportation, the relationship between Shelton and Baltic will provide both companies with the opportunity to explore significant long term commercial benefits. Shelton and Baltic intend to identify and take advantage of a broad range of joint initiatives, including identifying customers for the supply of crude oil and other products, facilitating suitable transportation and storage services and entering into product swap arrangements. Several opportunities have already been identified and are currently being progressed. The companies will further evaluate the strategic opportunities in order to explore ways of developing and strengthening the relationship in the future.

Robert Karlsson, Chief Executive of Shelton, commented:

“Baltic has built up a very impressive oil terminals and trading business and we see several areas of mutually beneficial cooperation. Securing a presence in hydrocarbons transhipment allows Shelton to take a further step in its strategy of becoming an integrated oil & gas company. We also look forward to supporting Baltic in evaluating significant growth opportunities for both companies’ benefit. I am looking forward to a long and successful relationship.”

Simon Escott, Chief Executive of Baltic, commented:

“Shelton are an ideal partner for Baltic as we seek to expand our business. They have considerable oil reserves and their production levels are expected to increase significantly in the short term. Their refining interests will also be highly complementary to our existing trading and terminals operations and represent a key potential synergy between ourselves and Shelton. As a major investor in Baltic, they will be able to provide access to a range of opportunities which with our expertise should benefit our operations.”

For more information, please contact:

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

robert.karlsson@sheltonpetroleum.com

www.sheltonpetroleum.com

Admission

Under the terms of the agreement entered into on 5 November 2010 between Shelton and Baltic with respect to the Equity Swap (the “Agreement”), Shelton has agreed to issue the 54,000,000 new Shelton Shares (the “Shelton Swap Shares”) to Baltic no later than the business day following the date of Admission (as defined below). Shelton has also agreed to procure that the Shelton Swap Shares are, following their issue, admitted to listing on the NGM, which is expected to take place by early December 2010.

In addition, under the terms of the Agreement, Baltic has agreed to allot and issue to Shelton the 14,957,368 new Baltic Shares (the “Baltic Swap Shares”) to Shelton conditionally upon admission of the Baltic Swap Shares to trading on AIM becoming effective (“Admission”) and the issue of the necessary valuation report required by section 593 of the Companies Act 2006 in relation to the consideration to be received by Baltic for the issue of the Baltic Swap Shares (the “Valuation Report”). Application has been made to the London Stock Exchange for admission of the Baltic Swap Shares to trading on AIM, and it is expected that dealings in the Baltic Swap Shares will commence on 11 November 2010. Baltic has engaged Grant Thornton UK LLP to provide the Valuation Report.

Further Information on Baltic Oil Terminals

Over the last four years, Baltic has built up a terminals business in the Russian ports of Baltysk and Kaliningrad. A separate enclave located between Poland and Lithuania, Kaliningrad is Russia’s only year round access to the Baltic Sea. Other ports in the region, such as St Petersburg, are frozen for much of the winter, as are many rivers, including the Volga River, one of the most significant commercial waterways in the world. As Russia relies on year round export of its vast supplies of petroleum products, Kaliningrad is thus a trading centre of major strategic importance.

Baltic’s key asset is a 50% interest in the Rosbunker terminal, which is located at Baltysk, right on the Baltic Sea at the mouth of the Pregol River leading into Kaliningrad. It is the only port in the region at which all types of ship can take on cargo, as the channel into Kaliningrad is too shallow for many vessels. Trains are able to deliver products from all over Russia, the Former Soviet Union and Asia directly to the terminal.

Since 2007, the Rosbunker terminal has been handling consignments of oil refined products, specialising in fuel oil (mazut), a product that requires heating and special equipment and as such is not handled by other terminals in the area.

Baltic earns tolling fees for processing the unloading of cargo from trains into storage tanks and then onto vessels. Baltic is also able to trade in these products in its own right, taking advantage of local price differences. Since the financial crisis in Russia, this market has become increasingly interesting to Baltic. Baltic’s transportation and trading activities utilises its extensive network of industrial partners and refineries.

In addition to Rosbunker, Baltic also has interests in several other oil product assets in Kaliningrad, which derive revenues through processing and distribution of oil products to domestic markets.

Baltic’s executive management have a wealth of experience of the oil services industry. The team has worked in the industry for more than 40 years, constructing and operating oil rigs, terminals and other infrastructure in world wide locations, including the Former Soviet Union.

Baltic has been listed on AIM since May 2006. It is headquartered in Kaliningrad, with a small representative office in London.

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 commenced production from one of its two successful exploration wells in Russia. In Ukraine, Shelton Petroleum’s wholly-owned subsidiary Zhoda 2001 has a strategic partnership with Ukrnafta, Ukraine's largest oil and gas company. It provides Shelton Petroleum with a stake in the oil producing Lelyaki field in Chernigov Region close to Poltava. Shelton Petroleum via a subsidiary 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 under the symbol SHEL B. The company has applied for a listing of its share on NASDAQ OMX Main Market.