Shelton Petroleum comments on Petrogrand’s fairness opinion. The valuation is
based on information that contradicts Petrogrand’s previous assessment of
Shelton Petroleum’s reserve base.
On 22 January 2014, Shelton Petroleum announced a public offer to the
shareholders of Petrogrand. Based on a fairness opinion from an investment
bank, the board of directors of Petrogrand recommends their shareholders not to
accept the offer.
Petrogrand has stated that it has “valued Shelton based on recognized
methodologies in the international capital markets”. In fact, the valuation
assumes that Shelton Petroleum’s oil reserves in Russia amount to 1 million
barrels, which is an assessment made in a reserves report from 2009. Since
then, during the four years up to date, there has been significant progress in
Shelton Petroleum’s assets. As an example, the valuation does not reflect the
recent successful drilling results from autumn 2013. Petrogrand has previously
described the results from the latest #12 well as “extremely encouraging” in a
report that Petrogrand sent to Shelton Petroleum in September 2013. In the same
report, Petrogrand assesses that if one new well is drilled with the same
results as in well #12, then reserves may amount to 5-6 million ton, which is
equivalent to approximately 40 million barrels.
“Making a reserves assessment is complex and always subject to judgment.
However, when Petrogrand base their recommendation on a fairness opinion that
assumes reserves of 1 million barrels when they previously have stated that
reserves may amount to up to 40 million barrels, it just does not add up”, says
Robert Karlsson, CEO of Shelton Petroleum.
Shelton Petroleum in cooperation with Aktiespararna (The Swedish Shareholders’
Association) hosted a presentation of the public offer yesterday. The
presentation in pdf format as well as a video recording of the event is
available at www.sheltonpetroleum.com and via direct link below. The video has
been broken up in two parts.
The presentation in pdf is attached (see pages 21-22 for Petrogrand’s earlier
assessment)
Shelton Petroleum comments on the offer to the Petrogrand shareholders (video
in Swedish) http://streamio.com/api/v1/videos/5315dab45b9035708700011d/
public_show?player_id=53158be15b903561e7000750
Presentation of Shelton Petroleum (video in Swedish)
http://streamio.com/api/v1/videos/5315c4095b9035064c00073e/public_show?
player_id=53158be15b903561e7000750
For more information, please contact:
Robert Karlsson, CEO, Shelton Petroleum, +46 709 565 141
robert.karlsson@sheltonpetroleum.com
www.sheltonpetroleum.com
About Shelton Petroleum Shelton Petroleum is a Swedish company focused on
exploring and developing concessions in Russia and the resource-rich basins of
Ukraine. In Russia, the company holds three licenses in the Volga-Urals area in
Bashkiria and has commenced production on the Rustamovskoye field after a
successful exploration program. In Ukraine, Shelton Petroleum’s wholly owned
subsidiary has a joint venture with Ukrnafta and Chornomornaftogaz, two leading
Ukrainian oil and gas companies. The Shelton Petroleum share is traded on
NASDAQ OMX Stockholm under the symbol SHEL B.
