* Income from oil sales amounted to TSEK 127,083 (0) * The net result after tax for the period was TSEK -120,699 (-7,619) * EPS was SEK -0.41 (-0.03) for the report period * Svenska Petroleum Exploration (SPE) new main shareholder * New agreement with Tomskayaneft gives increased capacity for oil delivery up to 7,500 barrels per day. The completion of the Transneft connection is therefore postponed in time. MD's report - The Quarter in brief Dear Shareholders, The third quarter has been characterized by an ever increasing market insecurity which is still expanding and which demands continuous analysis, reflection and capacity to act to be able to manage and negotiate in a wise manner. The price of oil has fallen by more than 65% since June which has been relatively unexpected by the markets. This has influenced the business climate also in Russia with significantly increased cautiousness both among consumers and producers. It has also resulted in an almost total halt of investments in many sectors including oil and gas. A positive effect for Russian oil producers can be the ongoing weakening of the rouble. Russia has lately been experiencing strong inflation and a depreciation of the rouble will decrease our production costs expressed in other world currencies. Furthermore, the Russian tax system was designed with more stable oil prices in mind rather than the current relatively rapid fluctuations on world markets which can bring tax effects that inhibit exploration and other investments. This influences Malka's activities and constitutes a changed reality to which we adapt ourselves. In light of this we have intensified our work to make operations more efficient through further cost reductions renewed focus on revenues or summed up; a renewed focus on cash flows throughout the group. Exploration activities will temporarily be minimized and the main force will be on development of existing fields and wells which leads us towards the set production target of 4,000 barrels per day by year-end. A renewed agreement with Tomskayaneft gives higher delivery capacity up to 7,500 barrels per day and hence we will wait further with our direct connection to the Transneft pipeline until volumes and sales prices motivate and support this investment in a businesswise sound way. It is encouraging to see continuously increasing production volumes on the two producing oil fields. In October the production was 3,210 barrels per day, an increase of 20% compared with September. Step by step we hereby get closer to the target of producing 4,000 barrels per day by year-end. We also plan to present new data on our reserves by the end of the year with expectations that our work to raise probable reserves shall give results. Before that we will also present conclusions from the new seismic report from the northern part of the license block. To conclude, the production potential in our license block remains but current market conditions and today's low oil prices makes it a tougher challenge to realize it in an optimal way. However, we do continue towards our vision of 30,000 barrels per day by 2012. Stockholm November 28, 2008. Fredrik Svinhufvud Managing Director Malka Oil AB Comments on the group's result and financial position Turnover and result Operating income for the period January 1 - September 30 2008 amounted to TSEK 129,787 (0), of which revenues from oil sales were TSEK 127,083 (0). The gross profit amounted to TSEK 7,268 (TSEK 0). Selling and distribution expenses were TSEK -18,659 (0) and in this item extra overhead costs depending on lack of own Transneft connection are included. Transaction costs of TSEK -24,106 (-9,643) relating to the share and convertible bond issues during the report period have been booked against equity. Net financial items for the period January 1 - September 30 2008 were TSEK -77,879 (6,631). The tax for the period amounted to TSEK 2,149 (-559). The group reports a net result after tax for the period January 1 - September 30 2008 of TSEK -120,699 (-7,619), equivalent to an earnings per share of SEK -0.41 (-0.03). The strengthening of the US dollar has had a negative influence on the result related to the increased book value of the debt for the USD dominated convertible loan. This affected the net result for the third quarter with TSEK -67,497. Investments Investments in tangible and intangible fixed assets in the group during the period January - September 2008 amounted to TSEK 331,951 (333,214), of which intangible fixed assets represented TSEK 327,009 (294,505). Valuation of assets The board of directors of Malka Oil sees no need for write-downs of the assets in the Group seeing that the geological results still are promising. To that, the current domestic oil prices in Russia are assessed not to be representative in the long-term. In addition, the rouble is expected to depreciate during the coming six months which will have a favourable affect on the Group's costs. The Board of Directors' view is that the company has the ability to finance itself in order to extract the company's reserves in a profitable way. Legal dispute Malka's subsidiary in Russia, OOO STS-Service, is involved in a legal dispute with a local drilling contractor, EERB. It is expected that the dispute will be settled in court in 1-2 months time. The Board of Malka sees no need for any provisions due to this dispute. Financing and liquidity Cash balances in the group amounted to TSEK 134,386 (112,312) at September 30, 2008. Employees The number of employees in group companies at the end of the report period was 184 persons, of which 27 were women and 157 were men. Operations Summary Malka Oil AB is an independent oil company active in Russia involved in exploration and production of hydrocarbons in the form of oil, gas condensate and gas. In conjunction with this, the subsidiary OOO STS-Service owns an oil licence valid for 25 years as from April 2005, which gives the company the right to extract all hydrocarbons found within the licence block during the licence period. The licence block measures just over 1,800 square kilometres and is located in the north-western part of the Tomsk region. It is surrounded by a large number of producing oil and gas fields. During the Soviet era six boreholes were drilled in the licence block, five of which were discovered to produce hydrocarbons. The existing seismic investigation within the block has, besides the three existing oil fields, identified another seven structures, i.e. potential oil fields. These will be subject to exploration drilling over the next few years. It should be mentioned that around one third of the licence block has recently been covered by seismic investigation and the final interpretation will be completed during the 4th quarter 2008. For further information, please contact: Fredrik Svinhufvud, Managing Director Malka Oil, tel +46 8 5000 7811, mobile +46 708 708 708 Richard Tejme, CFO, tel +46 8 5000 7812 mobile +46 707 31 52 17 (for complete report see attached file)