Petrogrand AB and Shelton Petroleum AB have entered into an agreement (i) to form a new combined and enlarged oil group with exclusively Russian oil assets and (ii) to dissolve the cross-ownership between the two companies. Shelton Petroleum's and Petrogrand's operations in Bashkiria and Komi regions respectively, both located in the European part of Russia, will be managed as one oil group.
The combined company will have a net working interest oil production of about 1,350 barrels of oil per day and 2P oil reserves of about 32 million barrels. The entity will be owned by the current shareholders of both Shelton Petroleum and Petrogrand, in total about 10,000 shareholders. The combined businesses will benefit from an attractive license portfolio and an improved position on the financial markets. Synergies are anticipated within operational management, oil sales, purchasing power as well as central administration.