Dear shareholder, and stakeholders,

I would like to take the opportunity to inform of recent developments in SOGH
on the present status of the company, as well as describing our future plans;


On January 14, 2013, the Extraordinary Shareholders' Meeting of SOGH carried
out a complete replacement of members of the Board of Directors. The previous
board and CEO were replaced, in connection with a voted non-confidence to the
Board of Directors. The reason for this was the fact that from August 2012, the
Board of Directors ignored the requests from a majority of shareholders (more
than 82% of shares) to convene an extraordinary shareholders' meeting.

The company’s majority shareholders had during mid 2012 come to the conclusion
that the previous Board of directors and the CEO were unable to manage the
company and its subsidiaries towards the critical objective of attracting
necessary investments to finance the company’ s Business Plan and further to
finance the critical expansion of the company’s production.

Now, it is clear to the new Board of Directors that the previous Board of
Directors were not interested in pursuing the development of SOGH through
executing the Business Plan worked out in 2011 by the corporate team headed by
N.A. Popova.

The careful implementation of Selena’s Business Plan would have released a
potential to increase the company’s oil production from present level of 121
000 bbl a year up to 1,2 Mmbbl a year, i.e. more than 10 times. The project
would have generated profits from 2014, and in 2013-2022, and the accumulated
amount of profits less taxes has a potential to rise above USD 300 million. 
The profitability of the company will, after the successful implementation of
the Business Plan, increases the gross margin from 34.6% to 66.9%. The project
is highly profitable and the risk level is attractively low with proven and
possible reserves (2P) of more than 40 Mmbbl.

It is very difficult to interpret the motives behind the previous Board of
Director decision on November 23 2012, to pledge 100% of shares in the
subsidiary Selena Oil & Gas AB (SOG) and a group of companies included in it,
to secure the loan granted by an external creditor in an amount of USD 2.05
million and approved by the previous management with an interest rate of 35%
p.a. A remarkable fact is that the assets pledged, have a book value of USD 40
million. A culpable aspect of this transaction is the close relationship and
common business affiliation between the previous Chairman of SOGH and the
Chairman and majority owner of the external creditor.

It is the new Board of Directors opinion that this decision and the execution
of it in January 2013 were unlawful and in violation with the practice of
Swedish Law. A Board of Directors must always seek to act in the interest of
all shareholders and in particular to seek to protect the company from any
external party seeking to acquire the company’s assets at an deflated
valuation. Today, the new Board of directors of SOGH cannot rule out that the
agenda of the previous board was not in the best interest of a majority of the
company’s shareholders.

The activities of the previous Board of Directors and its management will be
subject to careful investigations. At this point of time, it is too early to
rule out any future legal action from the company’s shareholders to challenge
the previous Board of Directors and its management’s actions.

The new Board of Directors has adopted a new strategy. The first part is to
bring in a new management seeking to normalize the situation in SOGH. The next
part is to begin the implementation of the company’s Business Plan. This
requires a new financing strategy. Since February, the company is in the
process of establishing plans to reduce the company’s dependency on its
creditors.

 

Best regards,

 

Chairman of the Board of Directors

Selena Oil & Gas Holding АВ,

Honored Oil Worker of Russia
                                                                                
                                                 

O.I. Popov

 

For further information, please contact:

Magnus Stuart, CEO

phone: +46 70 621 13 50,

e-mail: magnus.stuart@selenaoil.com

 

Selena Oil & Gas Holding AB (publ) (former Emitor Holding AB) is engaged in the
production of oil and in the Volga-Ural region in the Russian Federation,
including Perm and Udmurtia. The company is listed on NASDAQ OMX First North
Premier in Stockholm under the ticker SOGH. Mangold Fondkommission is the
company´s Certified Adviser and liquidity provider, telephone +46 8-503 015 50.