Geography and transport in the Russian license areas
The adjacent Rustamovskoye, Aysky and Suyanovskoye license blocks are situated 330 km to the northeast of the city of Ufa, the capital of Bashkiria. The license blocks encompass an area of approximately 500 sq km. The blocks are surrounded by producing oil and gas fields, all of them controlled by the mid-size Russian joint stock oil company Bashneft.
The terrain on the license block consists mostly of dry woods and rivers. Road infrastructure is in place both during the summer and winter. Compared to the severe climate conditions in Western Siberia, Bashkiria is quite favorable, since the climate allows work all year round.
Shelton Petroleum's Russian license blocks are strategically located for transportation of oil. Currently the company sells oil directly at well head and the oil is transported by tank truck. As further wells are drilled and production is increased, Shelton Petroleum will seek access to a pipeline with a connection point, which is situated in 10 kilometers from the border of the license field. The pipeline has free capacity, is owned by Bashneft and is connected to Transneft's trunk pipeline system. In the future, any natural gas produced may be sold on the local market, for example in the Duvansky region.