Year-end report January – December 2010

• Revenue for the period January-December: SEK 29 (0) million

• Operating result for the period: SEK -11 (-17) million

• Profit for the period after tax: SEK -12 (-16) million

• Basic and diluted earnings per share: SEK -0.03 (-0.10)

Statement from the CEO

As we close the year 2010, we note that Shelton Petroleum has taken several important steps in its development on a highly dynamic market. During the year, Shelton Petroleum has transformed itself from a pure exploration company active on only one geographic market, to a producing oil company with a portfolio of licenses in both Russia and Ukraine. Especially gratifying is the development on Rustamovskoye in Russia, where we as operator of the field have completed a successful exploration program and started production from two wells, which is far from self-evident when an exploration program is initiated. Last autumn we also acquired a significant equity interest in a refinery as well as in an oil terminals operation. Our strategy is to create an integrated oil company, which provides both financial and operational benefits.

The world around us has gone through changes during 2010. The price of Brent oil has increased by twenty-two percent during the year, Ukraine has elected a new president and multinational oil companies have become more active in the promising but still largely unexplored deposits in the Black Sea. At the same time, the oil sector in general and the countries in which Shelton Petroleum operates in particular, are strictly regulated and characterized by a large element of bureaucracy and control that at times cause issues that need to be resolved. Generally speaking, it is not without its challenges to do business in our markets. On the other hand, there is excellent yield potential for those with the ability to identify and take advantage of the business opportunities these markets present.

Shelton Petroleum has accomplished much during the year, but in terms of oil companies we are still a young company. It is with great confidence that I look forward to raising the existing production, converting resources into reserves and to consolidating our position as an integrated oil company during 2011.

Robert Karlsson