Strategy and objectives
Strategy
Balancing solid cash-flow generating production by exploration with higher potential and higher risk
The Shelton Petroleum group has a diversified portfolio of licenses including both exploration and production. The portfolio includes Rustamovskoye in Russia, where the company extracts oil from its two exploration wells and is implementing a multi-well infill development drilling program, the Suyanovskoye and Aysky exploration licenses in Russia, where Shelton has completed seismic programs and helium surveys, the producing Lelyaki oil field in Ukraine and the gas fields in the Black Sea and Sea of Azov where Shelton is in an exploratory phase.
Growth in Russia and Ukraine
Through local knowledge and experience, the company shall identify, purchase and develop attractively valued assets in Russia and Ukraine, including oil and gas assets in both upstream and downstream.
Form strategic partnerships
Shelton Petroleum's subsidiary (Zhoda 2001 Corp) has entered into a joint venture with Ukrnafta, the largest oil and gas company in Ukraine, which gives the company a forty-five percent share in the Lelyaki field. In addition, the subsidiary has signed a strategic cooperation agreement with Chornomornaftogaz, the leading Ukrainian company within offshore development of oil and gas deposits. The agreement gives the company a fifty percent share of the three significant license areas in the Black Sea and Sea of Azov.
Providing transparency, structure and good corporate governance to investors
Shelton Petroleum is listed on the NASDAQ OMX Main Market and shall be a transparent and well structured company, which meets the demands set by professional investors.
Objectives
Increase production in Bashkiria, Russia
Shelton Petroleum will continue exploration and increase extraction of oil in order to realize the potential of the Rustamovskoye, Aysky and Suyanovskoye license blocks. The short-term objective is to increase production from Rustamovskoye, where the company has completed a successful exploration program and commenced oil production from the first two wells, by drilling production wells.
Increase production at Lelyaki, Ukraine
The Lelyaki oil field was previously one of the largest producing oil fields in the Soviet Union, with a cumulative production of 385 million barrels of oil. The company plans to increase production by drilling new wells and by re-entering and sidetracking suspended wells. Investments in the Lelyaki oil field are self-financed through cash flows from oil sales. Well interventions show good economics as the required investments are low. The new wells are drilled in close proximity to pipeline infrastructure for rapid tie-in.
Convert resources to reserves
Shelton Petroleum will take steps to pursue its potentially high-yield exploration opportunities offshore in Ukraine and onshore in Russia. The work includes analysis of historical exploratory data and collection of new seismic data to prepare for selective, carefully assessed drilling.
Acquisition of new licenses and vertical integration
Shelton Petroleum has built effective personal relationships, strategic regional partnerships and a portfolio of projects onshore and offshore. Local knowledge and experience enables the company to identify, acquire and exploit attractively valued assets in Russia and Ukraine. Shelton Petroleum holds an equity stake in Pan European Terminals PLC (former Baltic Oil Terminals PLC), a UK public company listed on the AIM market in London. Baltic Oil Terminals owns, operates or leases terminals and tank capacity in Kaliningrad and Rotterdam.